Starbucks union plans Red Cup Day strike in 25+ cities - Bloomberg
On Wednesday, JPMorgan analyst Tien-tsin Huang revised the price target for Flywire (NASDAQ:FLYW) shares, reducing it to $16 from the previous $21, while continuing to hold a Neutral stance on the stock. The adjustment follows Flywire’s fourth-quarter earnings, which fell short of sales expectations, and the company’s forward-looking growth guidance for 2025, which is projected at 10-14%, not meeting the anticipated 20% or more. According to InvestingPro data, the stock has fallen significantly over the last three months, with a current P/E ratio of 109.4x, though analysis suggests the stock may be undervalued at current levels.
Flywire, a provider of payment and software solutions, has been facing challenges in the education sector, particularly with international education visas in Canada, Australia, and to a lesser extent, the United States. Policy changes have led to negative revisions in the company’s business model. In response, Flywire announced a strategic review of its portfolio and a reduction in force (RIF) of approximately 10%, aimed at aligning its operations with the current market conditions. This move is expected to support an adjusted EBITDA margin outlook, which is forecasted to improve by 300 basis points at the midpoint for 2025, aligning with prior expectations. Despite these challenges, InvestingPro data shows the company maintains strong liquidity with a current ratio of 2.33 and has achieved revenue growth of 26.5% over the last twelve months.
Despite the headwinds in the education sector, Flywire has shown resilience in areas it can control. The company’s travel segment, in particular, has been highlighted as a bright spot. Flywire is capitalizing on this strength by acquiring Sertifi, a hotel management software company that includes $3 billion in monetizable payment flow.
The strategic portfolio review is underway, and while the outcomes are yet to be disclosed, JPMorgan’s initial assessment suggests that Flywire may need to recalibrate its business to become a mid-teens growth company, as opposed to one that grows over 20%. The firm’s analysts will be monitoring the results of the review to see how it aligns with Flywire’s adjusted growth trajectory.
In other recent news, Flywire Corporation reported its fourth-quarter 2024 earnings, revealing a notable miss on both earnings per share (EPS) and revenue forecasts. The company posted an EPS of -$0.12, falling short of the anticipated -$0.002, while revenue reached $117.6 million, below the expected $120.26 million. In response to these results, several analysts have adjusted their ratings and price targets for Flywire. BTIG downgraded Flywire’s stock rating from Buy to Neutral, citing significant challenges in Canada and Australia and concerns over U.S. student visa applications. UBS also downgraded the stock from Buy to Neutral and reduced the price target from $25 to $15, highlighting the company’s fiscal year 2025 revenue growth forecast as falling short of expectations.
Deutsche Bank (ETR:DBKGn) followed suit, downgrading Flywire’s shares from Buy to Hold and slashing the price target to $16 from $26, attributing the decision to disappointing fourth-quarter revenue and a fiscal year 2025 outlook that fell short of expectations. Flywire’s revised fiscal year 2025 guidance includes a revenue growth forecast of 10-14%, excluding ancillary services and the impact of its $330 million acquisition of Certify. The company is undertaking an operational and strategic review to realign resources with areas of high growth potential and to reassess its most important geographies and business sectors. Additionally, Flywire has announced a reduction in force of 10% as part of broader cost-controlling measures amidst an uncertain business environment.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.