EML Payments' Turnaround Stumbles Into a 70% Collapse

A promising new-management turnaround kept getting delayed by slow contract implementation, and the stock's late-stage collapse increasingly looks like tax-loss selling.

17 Sep 2026 · 4 min read

EML Payments fell more than 70 percent from its 12-month high as a promising turnaround under new management repeatedly stumbled, culminating in a 20 percent cut to FY26 EBITDA guidance in April tied to delayed program go-lives and softer Northern Hemisphere consumer demand, before June's further collapse looked increasingly driven by tax-loss selling rather than fresh fundamental deterioration.

A turnaround story with a troubled history

Forager Funds described EML as a business with a littered history of things going wrong over time, but said it owned the stock and remained optimistic, rating it a buy and expecting a substantial change in profitability over the next few years under new management that had committed to holding the cost base flat. DMX Asset Management said EML seemed to have turned a corner with new leadership, exiting non-core and troublesome operations and refocusing on organic growth, with shares progressively discounting those improvements. QVG Capital said the stock slipped as investors remembered turnarounds are rarely quick, noting the prepaid card provider enjoys sticky customers and reasonably predictable revenues, qualities that give new management the most precious commodity of all: time, spent rebuilding a neglected front-end sales engine.

The pre-paid cards provider does at least enjoy sticky customers and reasonably predictable revenues. Qualities that give new management the most precious commodity: time.

— QVG Capital, Monthly Report, September 2025

A messy reset year, then a downgrade

Tamim Funds Management said EML was concluding a transitional reset year in FY26, setting the stage for robust growth from FY27 despite softer first-half results, with revenue falling 6 percent year on year to $108.4 million on lower interest and customer revenue, and underlying EBITDA down 16 percent to $28.0 million, with management tightening FY26 guidance to $58 million to $60 million from a prior $58 million to $64 million range while reaffirming confidence.

The downgrade arrives, and skepticism deepens

QVG Capital said EML revised its FY26 underlying EBITDA guidance from $58 million to $60 million down to $47 million to $50 million, noting that like fellow turnaround Generation Development, EML had taken longer than anticipated to convert new business wins into revenue, with very high incremental margins making earnings highly sensitive to missed revenue, though unlike GDG, EML's turnaround also involves an entirely new team, technology stack and go-to-market approach. Forager Funds said the softer first-half result and subsequent downgrade reflected lower customer activity in Europe and slower starts for new clients, with guidance including a decent amount of one-off costs from a platform migration, targeting cleaner results in FY27. DMX Asset Management said the surprise downgrade to revenue and profit guidance saw the market slash the stock's value by 25 percent for the month, with investors growing skeptical about the company's medium to longer-term potential following prior weakness.

The market's slashing of its value by 25% for the month, and that following prior weakness, investors have become skeptical around the company's medium to longer-term potential.

— DMX Asset Management, Monthly Report, April 2026

June's collapse looks increasingly like tax-loss selling

DMX Asset Management said EML declined 22 percent in June and had now fallen around 30 percent since its last material update on 1 May, leaving it trading more than 70 percent off its 12-month high, and noted the shares had since bounced around 15 percent on no news, highlighting the impact likely tax-loss selling can have on bombed-out companies like this. Forager Funds said EML disappointed during the year, with an operational turnaround that looked nicely underway a year earlier buffeted by macro exposures in North America and Europe.

At its 30th June price, EML is trading more than 70% off its 12 month high. Interestingly, in the days since month-end, the shares have bounced ~15% on no news, highlighting the impact likely tax loss selling can have on these bombed-out companies.

— DMX Asset Management, Monthly Report, June 2026

What fund managers say they are watching next is whether FY27 delivers the cleaner results Forager expects once one-off platform migration costs roll off, resolution of the delayed program go-lives finally converting to revenue, whether North American and European consumer demand stabilises, and whether the stock's extreme de-rating proves a genuine buying opportunity once tax-loss selling pressure fades.