Wise: disruptor is an understatement, says Barclays

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To say that Wise PLC (LSE:WISE, FRA:6WS) is a disruptor of the consumer and SMB foreign exchange transactions markets is “an understatement”, according to Barclays.


The fintech unicorn “has seen extraordinary growth” and has a run-rate transaction volume of over GBP62bn.


READ: Wise says first quarter financials were in line with expectations


“The strength of the user experience, increasingly global coverage, absolute fee transparency, faster transfer speeds and significant cost advantage have prompted rapid consumer and SMB adoption, primarily via word of mouth. Wise’s financial profile reflects this combination of rapid volume growth and cost-effective customer acquisition,” analysts commented.


“Over the past two years, revenue has grown at a 54% CAGR, and, unlike many fintechs at this stage of growth, Wise has been profitable since 2017. We see considerable upside potential to conservative mid-term guidance, if current trends sustain.”


The bank initiated coverage with ‘equal weight’ and 895 price target, although it sees potential for 1,240p.


Citi also began coverage and pushed the target price higher, to 1,030p, with a ‘neutral’ recommendation as it forecast a GBP180bn revenue opportunity in the mid-term.


Similarly, Credit Suisse (NYSE:CS.) see the stock as a ‘neutral’ with target price of 1,025p.


“We judge that Wise Transfer is superior on price (up to 8x cheaper than banks), speed, convenience and transparency. The superiority of its product and its low starting point create an opportunity for growth before market dynamics become limiting,” analysts said, forecasting five-year annual growth of revenue and underlying earnings (EBITDA) of 27% and 32% respectively.


Shares rose 2% to 1,006p at lunchtime.

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