UK Stocks: Wise Shares Plunge on Weak Profit Outlook

In key news on UK stocks, shares of fintech firm Wise PLC (GB:WISE) plunged 9% as of writing, after the company issued a weak profit outlook for Fiscal 2025. The dismal guidance overshadowed the company’s impressive performance in Fiscal 2024, which gained from a high interest environment.

Wise Reports Impressive Fiscal 2024 Results

In Fiscal 2024 (ended March 31, 2024), Wise posted a 229% jump in its reported pre-tax profit to £481.4 million. The company’s underlying income increased 31% to £1.17 billion, while the underlying profit before tax surged 226% to about £242 million.

Revenue increased 24% to £1.05 billion. The company attributed its solid results to the expansion of its customer base and higher interest rates.

Wise saw a 29% rise in its active customers to 12.8 million in Fiscal 2024. The company also experienced increased adoption of multiple features of its Wise account offering.

Dull FY25 Outlook

Wise expects its Fiscal 2025 underlying income to grow in the range of 15% to 20%, reflecting a slowdown from the 31% growth seen in the previous year. The anticipated moderation in interest rates is expected to adversely impact the company’s FY25 underlying income. Moreover, the payments company reduced its cross-border prices by more than 2 basis points at the beginning of Fiscal 2025.

Meanwhile, the company projects an underlying pre-tax margin of 13% to 16% over the medium term.  

Jefferies analyst Hannes Leitner, who has a Buy rating on WISE stock, called the FY25 profit outlook “disappointing,” noting the reduced prices. That said, the analyst thinks that the company’s decision to cut prices reflects optimism in the medium-term growth.   

Is Wise a Buy or Sell?

Analysts have a Moderate Buy consensus rating on WISE stock based on five Buys, two Holds, and two Sells. The average Wise PLC share price forecast of 990.43p indicates nearly 29% upside potential from current levels.

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