Digital Finance And AI Will Create New Lending Opportunities

Key Takeaways

• Proprietary technology and automation provide Wisr with a scalable cost advantage, supporting rapid expansion and improved margins versus competitors.
  
• Strong loan origination and digital-first adoption position Wisr for accelerated revenue growth, higher customer retention, and long-term portfolio quality.
  
• Reliance on wholesale funding, intense competition, and sensitivity to consumer credit cycles threaten Wisr's scalability, revenue growth, and long-term profit margins.

Catalysts

Engages in the lending business in Australia.

• Analysts broadly agree that strong loan origination is fueling growth, but the rate of 101% year-over-year expansion-already above guidance-is likely just the start given Wisr's small market share in a $58 billion TAM and accelerating structural tailwinds, suggesting the loan book could increase beyond current projections and drive exponential revenue growth in coming years.
  
• Analyst consensus emphasizes automation-driven margin expansion, but with automation already at 80% and rapid improvements in arrears and loss rates, Wisr appears uniquely positioned to achieve industry-leading net margins much faster than peers, as ongoing tech enhancements could reduce OpEx and credit costs further than current models account for.
  
• Wisr's proprietary technology and scalable platform provide an embedded cost advantage that can underpin aggressive product and geographical expansion-unlocking untapped markets and channels to fuel recurring revenue and future earnings resilience.
  
• Rising consumer adoption of digital-first financial products, coupled with Wisr's high customer NPS and wellness-focused ecosystem, sets the stage for disproportionately higher stickiness and wallet share, accelerating fee-based and cross-sell revenue growth.
  
• Leveraging advanced alternative data and AI-driven credit assessment, Wisr can not only sustain prime credit quality but also unlock new risk segments at superior economics, enabling both rapid portfolio growth and sustainable yield expansion over the long term.

Wisr Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Wisr compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Wisr's revenue will grow by 112.2% annually over the next 3 years.
• Even the bullish analysts are not forecasting that Wisr will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Wisr's profit margin will increase from -42.1% to the average AU Consumer Finance industry of 12.4% in 3 years.
• If Wisr's profit margin were to converge on the industry average, you could expect earnings to reach A$25.8 million (and earnings per share of A$0.02) by about August 2028, up from A$-9.2 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 8.2x on those 2028 earnings, up from -4.6x today. This future PE is lower than the current PE for the AU Consumer Finance industry at 12.0x.
• Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 11.53%, as per the Simply Wall St company report.

Wisr Future Earnings Per Share Growth

Risks

• Wisr remains heavily dependent on wholesale funding facilities and securitisation markets, as evidenced by the importance of its recent $267 million warehouse with Barclays and multiple references to warehouse and ABS programs; any deterioration or volatility in the cost or availability of this funding would increase interest expenses and compress net interest margins, negatively impacting overall earnings over time.
  
• Despite strong origination and loan book growth, Wisr's revenue growth is lagging, with only 6% year-on-year revenue growth for the last reported period while origination surged over 100%, indicating either yield pressure, lower unit economics, or accounting lags that could pressure future revenue and dampen near-term profitability.
  
• Wisr's business model is focused almost exclusively on the personal and secured vehicle lending segment, fields known for both intense competition and recent "big tech" and neo-bank disruption; if Wisr fails to maintain differentiation or respond to these technology-led competitors, customer acquisition costs could rise and market share and revenue growth may stagnate.
  
• As a subscale operator relative to larger banks and well-funded fintech entrants, Wisr may struggle to achieve the scalability required to drive high operating leverage; this structural disadvantage can result in persistently lower net margins relative to peers, limiting long-term profit growth even as the business scales.
  
• The company's performance is tied closely to consumer credit cycles and household financial health; long-term trends of high household debt, subdued wage growth, and heightened regulatory scrutiny in Australia could reduce the prime customer pool, increase compliance costs, and elevate credit losses, all of which could negatively affect loan growth, net margins, and long-term earnings power.

Valuation

• The assumed bullish price target for Wisr is A$0.11, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Wisr's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of A$0.11, and the most bearish reporting a price target of just A$0.07.
  
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be A$208.5 million, earnings will come to A$25.8 million, and it would be trading on a PE ratio of 8.2x, assuming you use a discount rate of 11.5%.
  
• Given the current share price of A$0.03, the bullish analyst price target of A$0.11 is 72.7% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.