BofA update shows where active managers are putting money
Investing.com -- Shares of Wise (LON:WISEa) fell sharply on Thursday after the company’s fiscal first-quarter results came in below expectations, weighed down by increased currency market volatility.
The fintech firm posted underlying income of £362 million ($485 million) for the three months ending in June, falling short of the £372 million average estimate from analysts surveyed by Bloomberg.
Despite the miss, Wise reaffirmed its full-year outlook, maintaining guidance for up to 20% growth in underlying income.
Wise shares were down 9.3% at £1,027 as of 07:55 GMT, marking its steepest intraday decline since January and erasing its year-to-date gains.
Earlier in the week, shares had climbed after Wise announced a deal with UniCredit SpA (LON:0RLS), which will use the company’s platform to upgrade its cross-border payments system.
Jefferies analysts attributed the earnings miss to currency-related pressures. “The miss was driven by higher FX headwinds,” they said in a client note. “We expect the stock to give back yesterday’s gains on the back of UniCredit platform win.”
Wise surprised markets last month by announcing plans to shift its primary listing to the U.S., citing the opportunity to reach 4,000 banks and 100 million customers.
Commenting on the move and the Q1 update, Robinhood (NASDAQ:HOOD) U.K. analyst Dan Lane said the results highlight “why Wise has got so frustrated with their London listing.”
He noted that the company stands out as the only real success from the 2021 IPO class and continues to perform strongly, adding that while its valuation may appear stretched in the U.K., it “may even get a short-term boost in the U.S.”
However, he added that "Wise might find the grass isn’t greener Stateside."
“Being a shining light for tech over here and being just another multi-billion dollar company there are two very different things,” the analyst continued, warning that Wise could struggle to match the growth pace expected in the U.S. tech space.