Wise shares tumble as forecasts disappoint analysts

[anchadian]

London’s largest listed fintech today saw its biggest-ever single-day share drop after a surge in profits was eclipsed by an earnings forecast that fell short of analyst expectations.

 

Money transfer business Wise, which yesterday had been worth £8.6 billion, today saw more than £1 billion of its market cap vanish after shares fell as much as 23% when markets opened. The stock has now fallen by nearly a third over the past two months.

 

The tumbling stock comes despite a huge rise in profits over the past year as the firm was boosted by higher interest rates.

 

https://ca.finance.yahoo.com/news/wise-shares-tumble-forecasts-disappoint-084851147.html

[john donson]

more costs, more profits, they can always buy back shares, seems popular

[OJAS]

And, for the sake of completeness, the rest of the article, which appears to be of greater relevance to those of us who use Wise's services from Thailand (as distinct from their shareholders), goes on to say:

 

Wise today posted a more than tripling of pre-tax profits of £481 million in the 12 months to the end of March, while turnover jumped by a quarter to top £1 billion for the first time.

The fintech, which does not have a UK banking licence, said it was unable to pay interest to account holders in a number of territories including the UK, where regulations prohibit it from doing so. The firm had set a target of returning 80% of interest income back to customers, which it had not met.

 

Wise said it would use the profits to cut prices for customers, adding: “Striving to reduce prices sustainably over time is an important form of investment for Wise.”

 

But the prospect of lower prices appears to have disappointed shareholders, who were unimpressed with the concomitant 15-20% underlying income growth forecast for its next fiscal year, which looked set to fall well short of the 31% growth in the previous year.

 

Wise defended the move, pointing out that cheaper money transfer fees was a key driver in its popularity with customers, adding that clawing market share from rivals “can only be achieved through building the best global infrastructure while driving growth through relentlessly pursuing incremental improvements in price, speed and convenience.”

 

“The announced guidance is disappointing at first glance given the price reduction,” Jefferies analysts said. “However, we think the cuts boost confidence in medium-term growth.”

 

[n00dle]

1 minute ago, OJAS said:

And, for the sake of completeness, the rest of the article, which appears to be of greater relevance to those of us who use Wise's services from Thailand (as distinct from their shareholders), goes on to say:

 

Wise today posted a more than tripling of pre-tax profits of £481 million in the 12 months to the end of March, while turnover jumped by a quarter to top £1 billion for the first time.

The fintech, which does not have a UK banking licence, said it was unable to pay interest to account holders in a number of territories including the UK, where regulations prohibit it from doing so. The firm had set a target of returning 80% of interest income back to customers, which it had not met.

 

Wise said it would use the profits to cut prices for customers, adding: “Striving to reduce prices sustainably over time is an important form of investment for Wise.”

 

But the prospect of lower prices appears to have disappointed shareholders, who were unimpressed with the concomitant 15-20% underlying income growth forecast for its next fiscal year, which looked set to fall well short of the 31% growth in the previous year.

 

Wise defended the move, pointing out that cheaper money transfer fees was a key driver in its popularity with customers, adding that clawing market share from rivals “can only be achieved through building the best global infrastructure while driving growth through relentlessly pursuing incremental improvements in price, speed and convenience.”

 

“The announced guidance is disappointing at first glance given the price reduction,” Jefferies analysts said. “However, we think the cuts boost confidence in medium-term growth.”

 

thankyou

[topt]

1 hour ago, OJAS said:

Wise defended the move, pointing out that cheaper money transfer fees was a key driver in its popularity with customers

I don't use them but haven't I seen recent reports on here that their charges have been increasing?

[Stocky]

2 hours ago, topt said:

I don't use them but haven't I seen recent reports on here that their charges have been increasing?

Depends on the currency pair, fees for Singapore Dollar to Thai Baht transfers are down.

[Moonlover]

4 hours ago, topt said:

I don't use them but haven't I seen recent reports on here that their charges have been increasing?

Yes they did increase slightly for GBP-THB transfers but nothing to be alarmed about, they are still have a very competitive edge.

[Captain Flack]

Couple of posts removed for breaking community rules.

 

Rule 8. You will not post vulgarities, obscenities or profanities.

 

Rule 22. You will not discuss methods of bypassing or blocking advertisements on ASEAN NOW, other websites or circumventing any censorship of the internet or other communications by lawful authorities.

[KhunHeineken]

At this stage, I'd still rather deal with WISE than a mainstream bank.  WISE would have to mess up very badly to end up a worse choice than a bank. 

[NoshowJones]

13 hours ago, Captain Flack said:

Couple of posts removed for breaking community rules.

 

Rule 8. You will not post vulgarities, obscenities or profanities.

 

Rule 22. You will not discuss methods of bypassing or blocking advertisements on ASEAN NOW, other websites or circumventing any censorship of the internet or other communications by lawful authorities.

It is understandable for AN to have adverts just like any other company, I don't mind bypassing adverts, but what I do mind is adverts jumping out at you when you are reading anything, or when they cover up part of what you are trying to read.

 

[Everyman]

22 hours ago, john donson said:

more costs, more profits, they can always buy back shares, seems popular

that doesn’t raise market cap

[Captain Flack]

57 minutes ago, NoshowJones said:

It is understandable for AN to have adverts just like any other company, I don't mind bypassing adverts, but what I do mind is adverts jumping out at you when you are reading anything, or when they cover up part of what you are trying to read.

 

If you have concerns about ads, please contact forum support.

 

The rules which were broken and why the posts were removed are clearly stated.
 

Posts that do not follow the rules will be removed.