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On Monday, JPMorgan initiated coverage on Wise (LON:WISEa) plc (WISE:LN) (OTC: WPLCF), a company specializing in cross-border payments technology, with an Overweight rating and a price target of GBP12.42. The firm’s analyst highlighted Wise’s success in reducing customer friction in a market traditionally characterized by slow and costly transactions. According to InvestingPro data, Wise boasts impressive fundamentals with an 80.85% gross profit margin and a perfect Piotroski Score of 9, indicating strong financial health.
Wise, with around 15 years in operation, has captured approximately 5% of the Personal and 1% of the Business cross-border market volume, which amounts to nearly GBP140 billion annually. This is set against a backdrop of a total market volume of GBP27 trillion. The analyst noted this market share as impressive, especially when compared to payment processing company Adyen (AS:ADYEN), which has less than 5% of the global processed payment volume after 19 years. InvestingPro analysis shows Wise’s strong market position is reflected in its robust 29.89% revenue growth and GREAT overall financial health score.
The analyst from JPMorgan expressed optimism about Wise’s potential for continued market share growth, driven by ongoing investments in growth. The firm anticipates sustained mid-to-high-teens percentage growth in Sales and Gross Profit for Wise. The expectation of continued market share capture, particularly in the Platform business, is also projected to contribute to multiple expansion for the company.
The coverage note from JPMorgan includes an in-depth analysis of Wise’s business model and strategy. It also examines the dynamics of the market and the competitive landscape, providing a detailed look at the company’s valuation. The analyst’s positive outlook underscores the potential for Wise to further solidify its position in the cross-border payments sector.
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