They are still a growth stock, unlike most incumbent financial services, who are steady state dividend cows.
Wise are focused on doing one thing very well - foreign exchange, which is a profit centre for banks. They are not going after the unprofitable bloat that might come with other financial services.
Reading their reports, they measure the right metrics (not just vanity ones). I’m pretty confident that they will continue growing at a similar pace for several years. I don’t know if this is the bottom for their share price, but my time horizon measured in the years, and I’m sure they’ll outperform the broader market.
I think wise is a great company, and I say that as someone also sitting on a big loss. IMO it was over valued at IPO and as a result is suffering way more than the broader market. When I’m feeling a bit more clear about the general macro trends in the market I’ll be looking to buy more.
I think wise did a good job. Look other fintech business like PayPal. Most of similar businesses lost over 70%. Don’t forget Wise just ipo last year. I don’t think wise can do better due to existing high inflation condition.
Ouch. I’ve not been following the share price at all since I sold out of my position at the end of October. It’s taken a battering.
But I agree with others that the service they provide is excellent and my wife and I use them all the time. They just need to navigate that tricky transition from innovative tech start-up to profitable sustainable business.
High debt? Cash to company is 357m whilst total borrowing is 96m. So net cash unless I’m reading it wrong.
Agree that high cost is a problem. These results would give you +10% last year but when cheap money is gone, the market doesn’t care about the top line, they care about bottom line. Wise can bang on about the revenue growth but cost is increasing at a higher rate. Revenue is vanity; profit is sanity as they say.
Fwd P/E is still in the 50s…so valuations still very rich.
With CEO being naughty and CFO fallen off his bike (literally), the market might see that the captains are wobbling a bit.
I don’t hold but do like what they do. Unfortunately in this market, valuations matter a lot.
But free cash flow and adjusted ebitda ~120m vs net income ~40m, adjusted ebitda unlikely to be fake news as cash matches? Seen this way ~25-30x p/e when you ex out the cash on balance sheet and growing topline at 30%/yr promising 20%/yr over midterm. Pretty good?
30% revenue growth gives est FY23 rev of 728m. Adj ebitda margin 20% per outlook gives 145.6m. Assuming adj ebitda to net income ratio stays constant, net income for fy23 would be 40m. At current mkt cap and even stripping out net cash (cash to company + short term liquid investments), I get a fy23 p/e of 58x vs fy22 p/e of 88x. I clearly don’t follow Wise as closely as you do so happy to be corrected. FCF yield is ok but lots of companies with better FCF yield.
Let’s just take your 25-30x p/e; is the market likely it at the moment? Also metrics aside, CEO tax issue is clearly not great. I don’t know how dominant they are in the market but a lot of competition in the payments sector. Rising costs etc.
Anyway, I guess we are all just making a call. As I said, I like the company but I’d wait for better valuations at this current macro environment before I dip in.
