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Western Union (WU)
NYSE:WU
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Western Union
(NYSE:WU)70Outperform
Positive Factors
Capital Returns
The company is maintaining its strong cash flow generation and sustaining a quick pace of capital returns to shareholders.
Consumer Services Performance
Consumer services segment delivered strong topline growth of +55% year over year and 200 basis points of sequential EBIT margin expansion.
Negative Factors
Long-term Growth Challenges
There does not appear to be a visible path to meaningful growth 2+ years into the Evolve 2025 initiatives.
Western Union (WU) vs. S&P 500 (SPY)
Market Cap
$3.60B
Dividend Yield8.83%
Average Volume (3M)6.18M
Price to Earnings (P/E)3.9
Beta (1Y)0.61
Revenue Growth-3.38%
EPS Growth63.33%
CountryUS
Employees9,000
SectorFinancial
Sector Strength93
IndustryCredit Finance
Share Statistics
EPS (TTM)2.74
Shares Outstanding337,934,540
10 Day Avg. Volume4,858,558
30 Day Avg. Volume6,179,831
Financial Highlights & Ratios
PEG Ratio0.06
Price to Book (P/B)N/A
Price to Sales (P/S)0.85
Price to Cash Flow (P/CF)6.70
P/FCF Ratio5.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$11.90Price Target Upside11.32% Upside
Rating ConsensusHold
Number of Analyst Covering12
Western Union Business Overview & Revenue Model
Company DescriptionThe Western Union Co. is a holding company, which engages in the provision of money transfer and payment services. It operates through the following segments: Consumer-to-Consumer; Business Solutions; and Other. The Consumer-to-Consumer segment facilitates money transfers between two consumers. The Business Solutions segment offers payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises and other organizations and individuals. The Other segment comprises electronic-based and cash-based bill payment services. The company was founded in 1851 and is headquartered in Denver, CO.
How the Company Makes MoneyWestern Union makes money primarily through fees charged for its money transfer services. Customers pay a transaction fee every time they send money, and the company may also earn revenue from foreign exchange margins on currency conversion. Additionally, Western Union generates income from bill payment services, where users pay a fee to facilitate the payment of utility bills and other obligations. The company has strategically partnered with a broad network of agents, including retail locations, banks, and online platforms, to expand its reach and accessibility. These partnerships are crucial as they allow Western Union to tap into a vast customer base and enhance its service delivery. Furthermore, Western Union's digital expansion, including mobile app transactions, provides a growing revenue stream as more customers turn to digital solutions for convenience and speed.
Western Union Financial Statement Overview
Summary
Western Union demonstrates strong profitability with solid margins but faces challenges with declining revenue and cash flow generation. The substantial reduction in debt enhances financial stability, yet the low equity proportion suggests potential risk in financial structure. Continued focus on revenue growth and cash flow improvement would be beneficial for sustaining long-term financial health.Income Statement
Western Union has shown a decrease in total revenue over the last few years, with a notable decline from $5.29 billion in 2019 to $4.21 billion in 2024. The gross profit margin in 2024 is approximately 37.75%, and the net profit margin is 22.18%, showing solid profitability. However, revenue growth has been negative, indicating a challenge in top-line growth.65
Positive
Balance Sheet
The company has significantly reduced its debt, resulting in a debt-to-equity ratio of 0 as of 2024, which is a positive sign of reduced financial leverage. The return on equity (ROE) for 2024 is high at 96.47%, reflecting efficient use of shareholders' equity. The equity ratio is 11.57%, indicating a relatively low proportion of equity in financing its assets.70
Positive
Cash Flow
Operating cash flow has decreased from $783 million in 2023 to $406 million in 2024, showing a decline in cash-generating efficiency. The free cash flow to net income ratio in 2024 is approximately 0.39, indicating moderate cash flow generation relative to net income. However, the free cash flow has remained positive, which is a positive aspect for financial stability.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.21B | 4.36B | 4.48B | 5.07B | 4.83B | Gross Profit |
| 1.59B | 1.69B | 1.85B | 2.17B | 2.01B | EBIT |
| 725.80M | 817.50M | 884.90M | 1.12B | 967.30M | EBITDA |
| 917.50M | 1.03B | 1.11B | 1.32B | 1.22B | Net Income Common Stockholders |
| 934.20M | 626.00M | 910.60M | 805.80M | 744.30M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.47B | 1.27B | 1.29B | 1.21B | 1.43B | Total Assets |
| 8.37B | 8.20B | 8.50B | 8.82B | 9.50B | Total Debt |
| 3.13B | 2.67B | 2.80B | 3.01B | 3.07B | Net Debt |
| -1.47B | 902.30M | 1.51B | 1.80B | 1.64B | Total Liabilities |
| 7.40B | 7.72B | 8.02B | 8.47B | 9.31B | Stockholders Equity |
| 968.90M | 479.00M | 477.80M | 355.60M | 186.60M |
| Cash Flow | Free Cash Flow | |||
| 368.90M | 635.30M | 373.40M | 830.70M | 720.70M | Operating Cash Flow |
| 406.30M | 783.10M | 581.60M | 1.05B | 877.50M | Investing Cash Flow |
| -16.30M | -140.80M | 525.50M | 192.00M | -113.40M | Financing Cash Flow |
| -69.30M | -896.80M | -1.18B | -1.27B | -773.50M |
Western Union Technical Analysis
Neutral
10.69
Price Trends
10.53
Positive
10.68
Positive
11.19
Negative
Market Momentum
0.06
Positive
51.80
Neutral
50.09
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WU, the sentiment is Neutral. The current price of 10.69 is above the 20-day moving average (MA) of 10.68, above the 50-day MA of 10.53, and below the 200-day MA of 11.19, indicating a neutral trend. The MACD of 0.06 indicates Positive momentum. The RSI at 51.80 is Neutral, neither overbought nor oversold. The STOCH value of 50.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WU.
Western Union Risk Analysis
Western Union disclosed 29 risk factors in its most recent earnings report. Western Union reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Western Union Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | $688.11B | 35.98 | 50.51% | 0.63% | 10.35% | 16.40% | |
80 Outperform | $524.16B | 41.40 | 198.52% | 0.49% | 12.07% | 17.27% | |
74 Outperform | $36.82B | 13.43 | 14.50% | ― | 10.06% | 38060.98% | |
73 Outperform | $66.75B | 17.39 | 20.00% | ― | 7.10% | 4.45% | |
73 Outperform | $25.52B | 16.72 | 7.05% | 1.00% | 4.68% | 63.39% | |
70 Outperform | $3.60B | 3.88 | 96.42% | 8.83% | -3.38% | 63.33% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% |
* Financial Sector Average
Performance Comparison
WU
Western Union
10.69
-2.03
-15.96%
GPN
Global Payments
100.28
-26.83
-21.11%
MA
Mastercard
558.30
89.36
19.06%
V
Visa
352.68
74.33
26.70%
PYPL
PayPal Holdings
69.50
11.38
19.58%
XYZ
Block
61.12
-14.41
-19.08%
Western Union Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: 2.99% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant positive trends such as consistent revenue growth, successful digital platform expansion, and strategic cost savings. However, challenges remain, particularly in the North American market and the retail segment. The overall sentiment is optimistic about future growth, but there are areas needing attention.Highlights
Positive Revenue Growth
For the third consecutive quarter, adjusted revenue grew by 1.4% excluding Iraq, highlighting the company's recovery strategy's success.
Consumer Services Growth
Consumer Services reported a 23% adjusted revenue growth, driven by the Media Network business and foreign exchange services.
Digital Platform Expansion
The next-generation digital platform was launched in over 10 countries, contributing to double-digit transaction growth and high single-digit revenue growth.
Operational Cost Savings
Achieved $60 million in savings in 2024 as part of the $150 million expense redeployment program, two years ahead of schedule.
Strong Balance Sheet and Shareholder Returns
Returned almost $500 million to shareholders and announced a $1 billion share repurchase authorization.
Lowlights
Challenges in North America
North American revenues experienced a modest deceleration, attributed to sluggishness and macroeconomic impacts.
Retail Business Decline
Retail business, excluding Iraq, was down about 3% year-over-year, despite slight improvements from the previous quarter.
Limited Iraq Contribution
Iraq's contribution significantly reduced, impacting the first and second quarter revenues of 2025.
Company Guidance
During Western Union's fourth quarter 2024 earnings call, CEO Devin McGranahan highlighted several key metrics demonstrating the company's performance and strategic direction. The company's revenue for the fourth quarter reached $1.060 billion, with an adjusted revenue growth of 1.4% when excluding Iraq. Consumer Services led this growth with a remarkable 23% increase, driven by the Media Network business, foreign exchange services expansion, and retail money order growth. The branded digital business also showed strong performance, with a 13% increase in transactions and 8% adjusted revenue growth. Adjusted earnings per share were reported at $0.40, up by $0.03 from the same quarter last year. The call emphasized the success of the Evolve 2025 strategy, which focuses on returning the company to sustainable, profitable revenue growth. Additionally, the turnaround in the Asia region was noted, with an 8% transaction growth and adjusted revenue decline narrowed to 3% in 2024. McGranahan expressed confidence in continuing this positive trajectory into 2025 and beyond.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.