Nayax Shares Plunge 25% in Two Days: Investment House Sees Buying Opportunity
Investors were alarmed by a sharp drop in cash flow and a lowered conversion rate forecast. However, William Blair maintains that these are strategic investments to support future growth and reaffirms its "outperform" rating for the stock.
Nayax shares have completed a 25% decline over the last two days following the publication of its financial reports for the first half of 2026. Nayax, which provides credit card processing solutions—commonly seen on the yellow payment terminals in vending machines or parking lots—reported a 28% revenue increase to $122.6 million. However, the company shifted to a $10.1 million loss, which it attributed to one-time expenses related to stock-based compensation.
What particularly surprised investors was the company's updated guidance.
Although Nayax reaffirmed its top-line revenue forecast of $510–520 million, it sharply cut its forecast for the annual free cash flow rate generated from adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization). The conversion rate is now expected to be only 5–10%, compared to the 40% forecast in the previous quarter. In the second quarter, this figure turned negative at $13.1 million, meaning the company spent more than it earned.
According to Nayax, this is due to investments intended to support future growth. This includes investments in its financial services and the operations of Lynkwell, acquired last year in the electric vehicle charging sector, which has temporarily impacted gross profit margins. Nayax maintains that its operational outlook remains unchanged.
Looking further ahead, Nayax continues to project $1 billion in revenue by 2028, with a 50% gross margin and a 30% adjusted EBITDA margin.
Investors reacted with concern, driving the stock down 16.5% on Tuesday and resulting in a 25% drop over two days. The company is currently trading at a valuation of 5.7 billion shekels.
The Investment Thesis Remains Intact
Despite the volatility, the investment house William Blair has reaffirmed its "outperform" rating for Nayax, suggesting that the sharp decline presents a buying opportunity.
"Investments in growth create noise, but the basic investment thesis has not changed," the firm noted, pointing out that the second-quarter weakness was driven by operational balancing and future-oriented investments rather than a fundamental decline in performance. While revenue reached $123 million (a 28% year-over-year increase, beating forecasts), EBITDA stood at $3.8 million, below expectations due to margin erosion in hardware sales.
Analysts are encouraged by the continued growth in recurring revenue, a 15% increase in average transaction size, and the company's reaffirmed guidance for 2026.
William Blair highlights long-term growth drivers, such as expansion into the EV charging sector and financial services (including an application to establish a bank in the USA), and has slightly raised its 2026 revenue forecast to approximately $518 million.
