Update On Wise: Why I'm Optimistic On The Company's Outlook
Intrinsic value of $12.7B or $12.4 per share
I maintain a buy rating for Wise plc, now trading at $13.7B with a reasonable 25x TTM PE, projecting a 10% annual return.
Wise is a technological leader disrupting traditional banking, expanding into business transfers, and building a strong software moat against competitors like Western Union.
Despite high performance, I expect Wise's revenue growth to decelerate, projecting an average 16.5% CAGR over the next 5 years with a 0.65% take rate.
By the end of my forecast period, I estimate that Wise processes 19% of the £2T personal TAM and 1.35% of the £12T business TAM.
Two years since my initial analysis on Wise plc (OTCPK:WIZEY), I am updating my thesis and maintaining a buy rating. The stock surpassed my target valuation of $9.15B and is now trading at $13.7B. It also seems to be trading within a reasonable pricing multiple of 25x TTM PE, indicating that the fundamentals are catching up to the required returns. If you are new to Wise, you can read my initial analysis for a breakdown of the company’s business segments.
Despite the high performance, I am essentially downgrading Wise from a stock with a 60%+ potential (as I rated it in 2022), to a growth stock trading around intrinsic value with an annual return potential of 10%.
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Full analysis at: https://seekingalpha.com/article/4753825?gt=663cfd579561c0e6
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