Wise Shares Decline 10% Following Announcement of Lowered Revenue Expectations
By Thea Felicity
Jun 13, 2024 12:27 PM EDT
Jun 13, 2024 12:27 PM EDT
(Photo : Wise Official Website)
According to CNBC, Wise's stock plummeted by 10% at its lowest point, recovering slightly to a 9.8% drop by midday London time.
Known for its cost-effective international money transfer services, Wise disclosed that it anticipates a modest underlying income growth of 15-20% for the fiscal year ending March 2025. This forecast pales in comparison to the 31% growth achieved in the preceding fiscal year, amounting to £1.2 billion ($1.53 billion).
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Wise adjusted its growth expectations downwards due to deliberate price cuts aimed at improving competitiveness and retaining more customers. Despite a substantial increase in pre-tax profit by 226% to £242 million ($260 million), Wise maintained a strong profit margin of 21%.
Financial analysts at Jefferies expressed initial disappointment with Wise's revised earnings guidance, emphasizing that the forecasted income growth of 15-20% falls 2% short of consensus estimates.
Nevertheless, Jefferies recognized the potential long-term benefits of Wise's pricing strategy, foreseeing enhanced investor confidence in the company's medium-term growth trajectory.
Wise ended the 2023 fiscal year with a 29% rise in active customers, reaching 12.8 million, conducting cross-border transactions amounting to £118.5 billion, indicating a commendable 13% annual increase.
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