ASX 200’s Fallen Stars: The Worst Performing Shares of The Year

The new financial year began last week, and as we push into the second half of calendar 2026, the ASX 200 remains within 1% of where it began the year. Last week we took a look at the top performing shares of FY26, and this week we glance back at the laggards, some of which already appear to be playing catch up after a difficult year. So could the laggards of yesteryear be names to keep on the watchlist for the year ahead?

It’s pretty fair to say that the ASX 200’s worst performers in FY26 read like a who’s-who of yesterday’s growth champions; with technology, healthcare and telecommunications names suffering savage sell-offs that left holders nursing losses of up to 70%.

WiseTech Shares Go From Leaders to Laggards. And back again?

The worst performer on the year was WiseTech Global shares (WTC), leading the carnage with a 70.2% drop to $33.00, transforming from a $30 billion logistics software darling into a cautionary tale about corporate governance. The company’s collapse was triggered by a range of governance issues that sparked board instability and multiple independent director resignations. Institutional investors, including Sands Capital, publicly flagged concerns about board independence and the balance of power between founder management and oversight structures, leading to shareholder votes against remuneration and governance resolutions throughout the year.

A glance at the first week of FY27 will have WiseTech holders feeling more positive, with WTC trading 13.2% higher since the start of the new financial year.

Xero Shares Suffer With Software Peers

Xero shares (XRO) were not too far behind, tumbling 59.1% to $72.22 after announcing its largest-ever acquisition, a US$2.5 billion purchase of unprofitable American payments platform Melio in June 2025, with potential earn-outs pushing the total to US$3 billion. The deal, aimed at cracking the lucrative US small business market, was met with immediate scepticism from analysts who questioned the 13-14x revenue multiple paid for a cash-burning business in a fiercely competitive landscape dominated by Intuit’s QuickBooks and Bill.com.

The pullback in XRO was helped along by a shift in sentiment in software names, with fears around moat erosion taking hold, as the AI trade pushed on. Looking at peers Stateside such as Intuit (NASDAQ: INTU), and it was a similar story, with INTU down 65% on the period. Less of a stock specific sell-off, and more of a sector trade that bulls will be looking to reverse. The early days of FY27 have seen Xero’s share price add 3.64%, with a 15% bounce off the June 23rd close.

Tuas Takes The Biggest Single Hit

Tuas shares (TUA) suffered perhaps the most dramatic single-day collapse, plummeting approximately 60% after Singapore’s regulator IMDA flagged that the company’s SIMBA network may have been using unauthorised radio frequencies. The regulatory bombshell prompted IMDA to suspend its review of Tuas’s proposed acquisition of M1, effectively putting the telecommunications company’s core growth strategy on ice. The stock finished FY26 at $2.27, down 60.2%, as markets repriced what had been viewed as a nimble disruptor into a distressed regulatory special situation with existential compliance risk.

Unlike the first two stocks on the list, TUA has continued lower through the first week of FY27, down 2.64% so far.

Healthcare next up, as COH, CSL, PME, TLX reverse course

The healthcare sector, traditionally a defensive haven for Australian portfolios, provided no shelter in FY26. Cochlear shares (COH) dropped 59.6% to $121.75, CSL fell 52.4% to $114.74, Pro Medicus (PME) declined 33.8% to $203.43, and Telix Pharmaceuticals (TLX) retreated 30.8% to $16.58.

The sell-off reflected a brutal combination of valuation compression, as investors rotated out of long-duration growth stocks into near-term cashflow generators, and specific operational headwinds including slower procedure volumes at Cochlear, margin pressure from rising plasma donor costs at CSL, and concerns about concentration risk at the previously untouchable Pro Medicus.

‘Soft’ economy causes pockets of pressure

REA Group, the property listings giant that had commanded premium multiples for years, fell 40.0% to $139.19 as concerns mounted about peak earnings in a softening housing market. REA is finding pockets of buyers through the first week, adding 5.81%.

Employment marketplace Seek dropped 44.4% to $13.45, caught between cyclical weakness in hiring and questions about pricing power.

Nine Entertainment, grappling with the structural decline of free-to-air television and fragmenting advertising budgets, collapsed 45.5% to $0.89. TPG Telecom shed 32.8% to $3.60 amid intense competition in Australian mobile and broadband markets.

Financials

The financial services sector contributed several names to the laggards list, with wealth platform Netwealth (NWL) down 39.5% to $20.56, asset manager GQG Partners falling 38.0% to $1.45, and SME-focused lender Judo Capital Holdings dropping 40.9% to $0.94. These declines reflected a combination of rich valuations meeting tougher operating conditions, flows volatility and fee pressure for GQG, growth expectations resetting for Netwealth, and credit quality concerns plus regulatory scrutiny for Judo in an environment of elevated funding costs.

Of the financials, Netwealth shares have showed the most intent since the start of FY27, rebounding 18.82% in the first week of trading.

Real estate and consumer discretionary

Lendlease (LLC) continued its multi-year struggle with legacy project write-downs and a weak development environment, falling 41.2% to $3.23, although things could have been far worse. The LLC share price added 30% off the lows in the final month of the fiscal year, although have given back 7% since the turn.

Treasury Wine Estates (TWE) dropped 41.0% to $4.76 as it navigated changing China trade conditions and premiumisation strategy execution challenges. ARB Corporation, the auto-accessories business, declined 43.0% to $18.92 as cost-of-living pressures crimped consumer discretionary spending on 4WD and off-road equipment.

Even the energy sector, which enjoyed supportive oil prices for much of the period, couldn’t save Beach Energy from a 36.4% decline to $0.86.

GrainCorp fell 35.4% to $4.91, exposed to softer agricultural cycles and less favourable grain prices compared to prior boom years, whilst defence contractor Austal (ASB), which had been among FY25’s best performers, reversed course with a 32.3% drop to $4.05, illustrating the sharp leadership rotation as project execution risks and margin pressure weighed on previously hot defence stocks.

Shifting tides?

The common thread running through FY26’s worst performers was a toxic combination of self-inflicted wounds and macro-driven multiple compression. For WiseTech, Xero and Tuas, specific corporate decisions (governance failures, aggressive M&A, regulatory non-compliance) turned former market darlings into problem children almost overnight.

For the healthcare and platform businesses, the pain was more about valuation and positioning, as crowded “quality growth” trades unwound violently when investors pivoted toward resources and other near-term cashflow stories.

Looking ahead to FY27, the key question for markets is whether the rotation into resources and away from long-duration growth stocks has run its course or has further to go. If interest rates remain higher for longer and investors continue to favour near-term cashflow-heavy cyclicals over growth, these former darlings could stay de-rated for multiple years. Any evidence that inflation is moderating and central banks are pivoting could trigger a sharp reversal, with the most oversold quality names snapping back violently as positioning unwinds.

The first week of the fiscal year has already shown some snapback, as volatility works both ways. Last year’s laggards were some of the previous year’s leaders, and who would bet against another reversal in the months ahead?