Stock of the day: Tyro Payments

(AI video summary)

This video was created on 5 June 2025 for IG audiences by ausbiz.

ASX code: TYR 

Tyro Payments sinks as CEO exits and strategy review looms

Tyro Payments saw its stock fall by 9% after chief executive officer (CEO) Johnathan Davey confirmed plans to leave within six months. Davey, who joined the company in 2021 and became CEO in 2022, is departing for a private equity role in Melbourne.

The announcement comes after a failed bid for SmartPay and a new pet insurance payments partnership revealed earlier this week.

Healthcare now key revenue driver

Tyro has shifted its focus from hospitality to healthcare, which now accounts for over half of its revenue. This change provides more stable income and enhances customer retention through Medicare-linked infrastructure.

Analysts view the healthcare channel as highly defensible, with the Commonwealth Bank of Australia (CBA) previously exiting the space after limited success.

Regulatory and structural risks

Proposed legislation led by Prime Minister Anthony Albanese aims to ban card surcharges. While processing costs will remain, vendors may be forced to absorb them, potentially pressuring margins.

Tyro’s banking licence is also under scrutiny. Markets previously hoped it would be eliminated to unlock capital. That decision was rejected by current leadership but could be reconsidered under a new CEO.

Cheap valuation despite strong coverage

Despite consistent 'buy' ratings from analysts, Tyro trades below even the lowest price targets. Four past takeover bids, including reported interest from Stripe, highlight its long-term appeal. Analysts see potential for upside if new leadership revisits the balance sheet strategy.

Tyro offers stable revenue, healthcare exposure, and latent takeover value. Analysts suggest holding, with upside potential if technicals or strategy shift.