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In afternoon trade, the S&P/ASX 200 Index (ASX:XJO) has reversed its earlier gains, slipping 0.15% to 8,072.8 points. Several notable ASX shares are driving the downturn, with four companies experiencing particularly sharp declines today. Here’s a look at why these stocks are falling:
DroneShield Ltd (ASX:DRO)
DroneShield’s share price has dropped nearly 9% to AU$1.16 following the release of its half-year results. Despite a 110% increase in revenue to AU$24.1 million, the counter-drone technology company reported a net loss of AU$4.8 million, widening from a loss of AU$2.9 million the previous year. The disappointing financial performance overshadowed the company's strong cash position of AU$230 million and a substantial AU$32 million order backlog. Although DroneShield has a promising AU$1.1 billion sales pipeline, investors seem concerned about the company’s profitability in the short term.
Guzman Y Gomez Ltd (ASX:GYG)
Shares of Guzman Y Gomez have fallen 3% to AU$34.71. The quick-service restaurant chain reported a 32.1% increase in revenue to AU$342.2 million and a 52.9% lift in pro forma EBITDA to AU$44.8 million, exceeding its prospectus forecasts. However, the market had anticipated even stronger growth, leading to the stock's decline despite the positive results. Investor sentiment appears to have been tempered by unmet expectations for higher growth rates.
Johns Lyng Group Ltd (ASX:JLG)
Johns Lyng’s share price plummeted 26% to AU$4.13 after the insurance building and restoration services company reported disappointing full-year results. The company experienced a 9.6% decline in revenue to AU$1.16 billion, falling short of its guidance of AU$1.2 billion. Although EBITDA increased by 8.5% to AU$129.6 million, this was below the forecasted AU$136.4 million. The company's forecast of declines in revenue and EBITDA for FY 2025 has also dampened investor confidence, contributing to the steep drop in its share price.
Zip Co Ltd (ASX:ZIP)
Zip Co’s share price has decreased by 9% to AU$2.06, following the release of its full-year results. The buy now, pay later provider reported a 28.2% increase in revenue to AU$868 million and a significant 243.2% rise in cash earnings before tax, depreciation, and amortisation (EBTDA) to AU$69 million. Despite these impressive figures, the market seemed to have expected even stronger performance, leading to the decline. Zip’s shares had surged over 500% over the past year, and today's dip comes after a period of significant gains.
Overall, while some companies reported strong revenue growth, investor reactions have been influenced by unmet expectations and concerns about future performance, contributing to the declines seen across these stocks.
