Nayax Shares Plunge 25% After Mixed Q1 2026 Results, Investment Firm Sees Buying Opportunity

Nayax, a payment solutions company known for its credit card processing in vending machines and parking systems, saw its stock drop 25% over two days following the release of its first half 2026 financial results. The company reported a 28% revenue increase to $122.6 million but posted a net loss of $10.1 million, attributed mainly to one-time stock-based compensation expenses. Despite confirming its revenue guidance of $510-520 million for 2026, Nayax sharply reduced its forecast for free cash flow conversion from adjusted EBITDA to 5-10%, down from 40% previously. In Q2 alone, free cash flow was negative $13.1 million, indicating higher expenditures than income.

Nayax explained the losses as investments to support future growth, including in its financial services and Lynkwell electric vehicle charging operations acquired last year, which also pressured gross margins. The company maintained its long-term outlook of reaching $1 billion in revenue by 2028 with a 50% gross margin and 30% adjusted EBITDA margin. Investors reacted negatively, pushing the stock down 16.5% on Tuesday and completing the 25% fall over two days, valuing the company at approximately 5.7 billion shekels.

Investment firm William Blair reaffirmed its "overweight" rating on Nayax, viewing the stock decline as a buying opportunity. They noted that the Q2 weakness was due to operational balancing and growth investments rather than deteriorating performance. Revenues beat expectations at $123 million, though EBITDA of $3.8 million fell short due to margin pressure on device sales. Analysts remain optimistic about recurring revenue growth, a 15% increase in average transaction size, and the company’s 2026 guidance. William Blair highlighted long-term growth drivers such as expansion in electric vehicle charging and financial services, including plans to establish a U.S. bank, and slightly raised their 2026 revenue forecast to about $518 million.