Digital Transformation Will Expand Global Cross-Border Opportunities

Key Takeaways

• Integration of recent acquisitions, operational streamlining, and AI automation could rapidly improve profitability and make travel a core earnings driver.
  
• Flywire is positioned to benefit from global payment shifts and industry consolidation, supporting multi-year revenue growth and expanding recurring, high-margin client relationships.
  
• Heavy reliance on education and healthcare sectors, regulatory risks, and increased competition could compress margins, reduce growth, and heighten revenue volatility.

Catalysts

Operates as a payments enablement and software company in the United States and internationally.

• While analyst consensus sees the Sertifi acquisition as a revenue catalyst in travel, integration progress and rapid client onboarding indicate Flywire could unlock far more than several billion in additional payment volume annually, catalyzing a step-change in travel revenue and profit mix as the vertical quickly becomes a core earnings engine.
  
• Analysts broadly expect targeted cost savings and operational streamlining to modestly benefit net margins; however, the consolidation of product, payments, and business operations-paired with AI-enabled automation-can drive a much sharper, sustained improvement in operating leverage and EBITDA margin expansion, especially as automation scales across Flywire's global client base.
  
• As cash and bank-based payments decline globally, Flywire's platform is uniquely positioned to capture accelerated share in international education, healthcare, and B2B by serving as the trusted, multi-currency hub for both traditional institutions and mobile-native consumers, setting up a multi-year tailwind for transaction and platform revenue growth.
  
• Flywire's land-and-expand model, driven by deep client integrations and rapid rollout of new software modules across large university and healthcare networks, should cause net revenue retention to rebound and potentially exceed historical highs, supporting compounding revenue growth and increasing high-margin recurring revenues.
  
• With rising regulatory complexity and the proliferation of alternative payments, legacy bank processors are increasingly uncompetitive-Flywire's purpose-built, verticalized payment ecosystems and expertise in compliance will enable it to capture an outsize share of industry consolidation, opening up outsized opportunities for both new client wins and robust cross-sell, significantly boosting medium
• and long-term earnings growth.

Flywire Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Flywire compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Flywire's revenue will grow by 19.5% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from 1.0% today to 18.7% in 3 years time.
• The bullish analysts expect earnings to reach $163.5 million (and earnings per share of $0.74) by about July 2028, up from $5.0 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 14.2x on those 2028 earnings, down from 283.0x today. This future PE is lower than the current PE for the US Diversified Financial industry at 17.5x.
• Analysts expect the number of shares outstanding to decline by 2.96% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.15%, as per the Simply Wall St company report.

Flywire Future Earnings Per Share Growth

Risks

• Flywire is exposed to potential international payments regulation, increased geopolitical risk, and shifting visa/immigration policies in key education markets, which could restrict cross-border flows and shrink Flywire's addressable market, impacting future revenue growth and earnings.
  
• Sustained momentum in traditional cross-border education markets is uncertain, with explicit management caution that Canadian and Australian education revenues are down in the high 20 percent range year-over-year, while U.S. education is guiding to low single digit growth in an environment of softer international student demand and ongoing macroeconomic volatility, which could reduce revenue and pressure net margins.
  
• A growing proportion of lower-fee, lower-margin domestic payment processing volumes, as seen in the U.K. and U.S. education segments, may compress company-wide net margins over time, especially if domestic expansion outpaces higher-value cross-border transactions.
  
• The accelerating commoditization of payment services, pricing transparency, and increased competition from large incumbents and new fintech entrants mean that Flywire could face further pricing pressures, negatively impacting both revenue growth and gross profit margin in the long run.
  
• Structural reliance on a concentrated set of verticals such as education and healthcare makes Flywire highly sensitive to sector-specific downturns or regulatory changes; recent guidance already reflects education headwinds in multiple geographies, which may drive volatility in revenue and limit sustainable earnings expansion.

Valuation

• The assumed bullish price target for Flywire is $17.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Flywire'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 $17.0, and the most bearish reporting a price target of just $9.0.
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $873.3 million, earnings will come to $163.5 million, and it would be trading on a PE ratio of 14.2x, assuming you use a discount rate of 7.1%.
• Given the current share price of $11.54, the bullish analyst price target of $17.0 is 32.1% 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.