On Monday, Citi reaffirmed its positive stance on Flywire (NASDAQ:FLYW), a leading provider of global payment and receivables solutions, maintaining a Buy rating and a $33.00 price target on the company's stock. The endorsement follows recent investor meetings in London with Flywire's management team.
The analyst from Citi noted that interest in Flywire has been reigniting after a period of relative quiet subsequent to the company's first-quarter financial results. Despite the stock's performance post-earnings, the analyst observed encouraging signs of progress across Flywire's various business verticals, suggesting that the company's business trajectory remains solid.
During the investor meetings, Flywire's management addressed key topics of interest to investors, including changes in student visa policies in different markets. These straightforward discussions were reportedly well received. Additionally, the company's prospective improvements in disclosure, especially regarding the clarification of foreign exchange-neutral trends, were viewed as positive.
Citi's analyst acknowledged that the lower revenue outlook, impacted by foreign exchange factors, might lead to a period where confidence in the stock needs to be rebuilt. Nevertheless, the firm anticipates that Flywire's stock will establish a foundation for potential upside.
The analyst highlighted Flywire's valuation, noting that the stock is trading at an attractive profit multiple, with a low-teens adjusted EBITDA multiple for 2025 compared to a projected compound annual growth rate (CAGR) of over 60% for the period from 2023 to 2025. This CAGR assumes revenue growth in the upper twenties.
The report concluded with a reinforcement of the Buy rating, suggesting that the current valuation offers an opportunity for investment engagement in Flywire's high-growth stock profile.
InvestingPro Insights
According to InvestingPro data, Flywire (NASDAQ:FLYW) has a market capitalization of $2.06 billion. The company has shown impressive revenue growth with the last twelve months as of Q1 2024 recording a 32.48% increase, demonstrating a strong upward trajectory in its financial performance. Despite the challenges highlighted in the article, Flywire's gross profit margin remains robust at 63.31%, reflecting its ability to maintain profitability in its operations.
From an InvestingPro Tips perspective, Flywire's stock is currently trading near its 52-week low, which may indicate a potential buying opportunity for investors looking for undervalued stocks. Additionally, while the company has not been profitable over the last twelve months, analysts predict that Flywire will become profitable this year, signaling a turnaround that could appeal to growth-focused investors.
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