WISE: Double Digit Earnings Momentum Will Strengthen Shareholder Value Over Time

The analyst price target for Wise has been trimmed slightly, with recent Street research nudging it down by 5 GBp to 1,375 GBp as analysts factor in modestly higher discount rates while still anticipating solid double digit revenue and earnings growth from the Wise Platform through fiscal 2028.

Analyst Commentary

Street research remains broadly constructive on Wise, with recent notes highlighting both the strength of the Wise Platform growth profile and the sensitivity of valuation to discount rate assumptions and execution risks.

Bullish Takeaways

• Bullish analysts point to the Wise Platform's projected 23 percent underlying income growth and mid teens earnings growth through fiscal 2028 as support for a premium multiple versus traditional payments peers.
• Upgrades to Buy ratings and maintained Overweight calls signal confidence that Wise can translate scale advantages and product expansion into sustained double digit top line and earnings momentum.
• The modest 5 GBp trim in the JPMorgan price target to 1,375 GBp is framed as a technical adjustment to higher discount rates rather than a change in fundamental outlook, which reinforces a positive long term view.
• Analysts argue that continued execution on the Wise Platform, particularly deeper integration with enterprise partners, can drive operating leverage and upside to current earnings forecasts.

Bearish Takeaways

• Bearish analysts caution that even with healthy growth, Wise's valuation already discounts a long runway of execution success, leaving limited room for missteps on product delivery or geographic expansion.
• Higher discount rates and a more uncertain macro backdrop increase the risk that future cash flows are valued more conservatively, which could cap near term share price upside despite strong fundamentals.
• Some observers highlight that growth deceleration from very high historical levels toward the low to mid twenties could trigger multiple compression if the company does not consistently meet or beat guidance.
• Competitive pressure from both incumbent banks and new fintech entrants is seen as a structural risk that could weigh on pricing power and margin expansion over the medium term.

What's in the News

• Wise Platform partners with Wealthsimple to power low fee, fast international payments for Canadian chequing and joint chequing customers. This enables transfers to 30 countries in over 10 currencies directly from the Wealthsimple app or website (client announcement).
• The Wealthsimple integration highlights Wise's transparent pricing model by showing the mid market exchange rate, explicit fees, and expected delivery time within the app. This enhances user trust and experience for cross border transfers (client announcement).
• Wise is tripling its North American office footprint in Austin to 90,000 square feet across three floors in Domain Tower II. This reinforces its commitment to the region and its status as a major local tech employer (business expansion).
• The expanded Austin hub will host teams from engineering, product, marketing, and customer support as Wise continues hiring across functions in the United States (business expansion).

Valuation Changes

• The discount rate has risen slightly from 7.52 percent to 7.55 percent, reflecting a modest increase in the risk profile applied to future cash flows.
• Revenue growth has edged up marginally from 13.85 percent to 13.86 percent, indicating a very small upward revision to medium-term topline expectations.
• The net profit margin has fallen slightly from 17.80 percent to 17.08 percent, implying a modest downgrade to projected profitability levels.
• The future P/E has increased from 34.38x to 35.85x, suggesting a small expansion in the valuation multiple despite relatively minor changes to underlying forecasts.
• Fair value per share remains unchanged at 11.80, indicating that the combined impact of higher discount rates, slightly higher growth, and lower margins is broadly neutral at the aggregate valuation level.