First Read: Wise "FY26 Results First Read" (Buy) Forsythe

Research evidence excerpt

First Read: Wise "FY26 Results First Read" (Buy) Forsythe

Forecast returns

Forecast price appreciation 39.8%

Forecast dividend yield 0.0%

Forecast stock return 39.8%

Market return assumption 9.1%

Forecast excess return 30.7%

Company Description

Wise is a UK-based FinTech founded in 2011, which provides personal and business users

with low-cost, transparent cross-border currency transfer services and multi-currency bank

accounts. Its core products are Wise Transfer, Wise Account, Wise Asset , and its white-label

solution, Wise Platform.

Valuation Method and Risk Statement

Risks to our rating and target price include: 1) another cross border payment rail (network)

emerging (i.e., CBDCs, blockchain, Visa Direct) and impacting the differentiation of Wise's

proprietary tech stack; 2) drastic moves in interest rates will negatively impact operating

results should it occur; 3) as a consumer facing application it is possible that consumer

preferences change or their experience or interface becomes outdated over longer time

frames (requiring consistent innovation); 4) cost of sending remittances increases drastically

due to moves in FX prices which Wise is not prepared for. For valuation, we employ a

multiples based approach to our valuation, using a SOTP of core EBITDA (operating EBITDA)

and interest income, and apply a different multiple to each. Given the cyclicality of interest

income, and our current path in the interest rate term structure, we appear to be peaking,

meaning EBITDA growth is likely to be impacted by lower rates in the future (and therefore

should be attributed a lower multiple due to uncertainty of cash flows). We apply a multiple

to our core EBITDA, considering its historical multiple, and industry peers (who are not the

most comparable admittedly).