Investing.com -- Shares of Edenred (EPA:EDEN) fell sharply on Thursday following the release of its Q3 results, an about 2% miss on revenue expectations and a more cautious outlook for 2025 and 2026.
At 5:34 am (0934 GMT), Edenred was trading 13.8% lower at €29.65.
The company reported total revenues of €682 million, falling short of the consensus estimate of €695 million.
Edenred also narrowed its 2024 EBITDA guidance to €1,245–1,285 million, shifting to the middle of its previous range of €1,230–1,300 million.
The shortfall in revenue was driven by weaker performance across key divisions and regions.
Employee Benefits, one of Edenred's largest segments, reported €398 million in revenue, below consensus estimates of €407 million.
Mobility Solutions and Complementary Solutions also lagged behind market expectations, with revenue of €152 million and €69 million, respectively.
Geographically, the miss was most prominent in Europe, which generated €367 million compared to the expected €377 million.
However, Latin America offered a bright spot, exceeding forecasts with €189 million in revenue, up from the consensus of €186 million.
Analysts at Citi Research flagged that the revenue miss, alongside the guidance narrowing to the midpoint of the range, contrasts with Edenred’s typical pattern of tightening guidance toward the higher end.
This shift could signal that the company’s growth momentum is slowing, particularly as it faces potential regulatory changes in key markets.
One major concern raised by Citi is the proposed 5% fee cap on meal vouchers in Italy, which could take effect in the first half of 2025.
Edenred has voiced its disagreement with the proposal, but if it moves forward, it could result in an estimated €60 million impact on sales for the year.
In 2025, Citi expects the fee cap to weigh on EBITDA growth, with a faster growth rate of over 10% versus its mid-term target of 12%.
As a result of the regulatory uncertainty in Italy and the already moderated growth expectations for EBITDA in 2025 and 2026, Edenred's outlook has been clouded and its stock has been pressured.