Wise Stock Analysis | The Best Alternative to PayPal?!




Wise Stock Analysis | The Best Alternative to PayPal?!

Wise is the greatest tech success story Made in the UK — powered by Estonia. The fintech company has created a new way of transferring money, and we all benefit from it.

This stock analysis has a closer look at various aspects of Wise's financial performance, its market position and the factors influencing its share value.

Quick Overview - Wise Stock Analysis

  • Ticker: LSE : WISE
  • Sector: Technology
  • Industry: Information Technology Services
  • Revenue (£M): 846.1 
  • Net Margin: 13.5%
  • P/E: 49.71 
  • P/B: 982.59 
  • Equity per Share: £0.7 
  • Return on Equity: 19.8%
  • ROIC: 8.7%
  • Dividend Yield: 0.00%
  • Market Capitalisation (£B): 8.64

Investment Thesis

Today, the online money transfer market plays a decisive role in the digital financial and economic world: With the increasing trend towards digital financial services and the globalization of the economy, the demand for efficient and cost-effective online money transfer services has risen significantly. These services allow individuals and businesses to transfer money quickly and securely across international borders, leading to accelerated financial integration and improved access to financial services worldwide. Competition in this market is intense as companies constantly strive to offer innovative solutions to meet the evolving needs of consumers.

Wise plc, the best alternative to PayPal?!: Wise plc has successfully evolved into a leading online money transfer service. In contrast to PayPal, which primarily focuses on facilitating payments in electronic commerce, Wise concentrates on providing cost-effective and transparent cross-border money transfers for individuals and businesses. In terms of innovation and cost structures, I would say that Wise surpasses PayPal. Nevertheless, PayPal continues to play a significant role in online payment processing.

Is Wise plc stock undervalued? Wise plc is an emerging British fintech company that is revolutionizing global online money transfers with its range of services. Notably, it has not posted any losses since its IPO and is also solidly financed. However, is this a reason to buy the stock now, or should investors wait despite the positive growth prospects?

Where is the fair value, and how much potential is actually still in the stock? That's what I want to work out step by step in the following company analysis. Let's get started!

Company - Wise plc


  • 2011: Kristo Käärmann and Taavet Hinrikus started TransferWise in the UK & EU.
  • 2012: First office opened in London and the team raised US$1.3 million in seed funding.
  • 2014: Sent and received £1 billion in cross-border payments. Secured US$58 million Series C funding to expand globally. The Company then launched in the US and Australia.
  • 2016: Launched their first business specific send money service, allowing SMEs and sole traders to save money on international fees. Became the first tech company with direct access to UK Faster Payments Service.
  • 2017: Launched their Asia Pacific hub in Singapore and worked alongside the Monetary Authority of Singapore (MAS) to become one of the first remittance companies to verify customers online. First announced profitability, with over £1 billion being moved across the platform every month.
  • 2018: Wise welcomed 1,000th Wiser Debit Mastercard launched in the UK, EU, US, Australia, New Zealand and Singapore.
  • 2019: Opened their Brussels office, marking their 10th location around the globe. The Belgian office serves as a gateway to post-Brexit Europe.
  • 2020: FCA licence to offer regulated investment activities in the UK granted; allowing for launch of Assets feature.
  • 2021: TransferWise became Wise. Direct listing on London Stock Exchange. Wise launched Assets, letting customers invest in a portfolio of stocks while still being able to spend or send up to 97% of their invested money instantly.
  • 2022: Wise Account launched in Brazil and Malaysia. Launched International. Receive to receive money via Swift.
  • 2023: Wise launched their new look. Wise welcomed its 5,000th Wiser. Launched ‘Interest’ Assets feature in UK, Singapore, France and Spain.
  • To be continued


The fintech industry (financial technology) has brought about significant changes in the way financial services are delivered in recent years. A focus within this sector is on online money transfer services. These services enable users to transfer money electronically from one location to another without relying on traditional banking services.

In brief, online money transfer services in the fintech industry provide the opportunity to conduct financial transactions quickly, securely, and cost-effectively. Unlike traditional bank transfers, users can often utilize these services through mobile apps or websites. These platforms leverage innovative technologies, including blockchain and other digital payment technologies, to make transactions more efficient.

Leading challenger banks worldwide - Source statista - Statistics report on digital banks

Source statista | Statistics report on digital banks, January 2024

Many online money transfer services have also revolutionized international transfers by minimizing traditional barriers such as high fees and slow processing times. This has brought significant benefits, especially for individuals who need to make cross-border transfers.

Well-known companies in this sector include PayPal, Wise, Revolut, Square Cash, and many more. The constant innovation and integration of new technologies make online money transfer services a significant area within the fintech industry.

Western Union

Western Union is an internationally recognized provider of money transfer services that enables people to send and receive money worldwide. The Western Union service includes both physical locations and an online platform for money transfers.

Western Union - Wise plc

Source - Wikimedia Commons | Photo by Gijs Bolmeijer

Online money transfers through Western Union allow users to send money quickly and securely to recipients in various parts of the world. The online platform of Western Union is typically user-friendly and offers various payment options, including credit cards, bank transfers, and cash pickup at physical locations.

The service plays a crucial role in international remittances, especially for individuals sending support to family and friends abroad or needing to receive money themselves. The flexibility of Western Union regarding deposit and pickup options makes it a popular choice for many engaging in cross-border transactions.

It is important to note that while Western Union has a traditional approach to money transfers, it also leverages various technologies to make the service more efficient and secure. The service has been in existence since 1871 and remains a relevant force in the field of international money transfers.


OFX is an online money transfer service that allows users to transfer money electronically from one location to another. The company is headquartered in Sydney, Australia, and provides services for international money transfers.

OFX - Wise plc

Source - OFX

OFX aims to be a cost-effective alternative to traditional banks for cross-border transfers. By utilizing online platforms, users can conduct transactions quickly and efficiently. The company typically offers more favourable exchange rates and lower fees compared to traditional banks.

OFX's platform enables customers to trade currencies online and make transfers to various countries. The company uses modern technologies to ensure the transfer process is secure and transparent. OFX caters to both individuals and businesses that need to make international payments.


Remitly is an online money transfer service headquartered in Seattle. Founded in 2011, the company specializes in facilitating international transfers efficiently, securely, and cost-effectively, particularly for individuals sending money to their home countries.

Remitly - Wise plc

Source - Remitly

Remitly's platform allows users to make money transfers through its website or mobile app. The focus is on making the transfer process user-friendly and minimizing traditional obstacles such as high fees and lengthy processing times. Remitly has particularly concentrated on improving the experience for immigrants and individuals with international connections who regularly send money to their countries of origin.

The company utilizes technologies like artificial intelligence and mobile applications to offer fast and transparent transfer services. It also enables users to track the progress of their transfers and make real-time payments.


PayPal is a leading online money transfer service headquartered in San Jose, California. Established in 1998, PayPal has become one of the most well-known and widely used payment service providers in e-commerce. The company allows users to send and receive money electronically, make online purchases, and conduct transactions securely and conveniently.

PayPal - Wise plc

Source - PayPal

Acting as an intermediary between buyers and sellers, PayPal provides a secure platform for transactions. Users link their bank accounts or credit cards to their PayPal accounts, and then they can send money to other PayPal users or make payments for goods and services online.

One significant advantage of PayPal is that sensitive financial information doesn't need to be exchanged directly between buyers and sellers, enhancing the security of transactions. Additionally, through acquisitions and strategic partnerships, PayPal has expanded its range of services to include other financial offerings, such as lending and mobile payment solutions.

The platform is utilized globally and has become an integral part of the digital payment ecosystem, with millions of individuals and businesses relying on PayPal to handle their financial transactions.

Business Model

Wise plc is a leading online money transfer service headquartered in London, United Kingdom. The company was founded in 2011 by two Estonians, Taavet Hinrikus and Kristo Käärmann. Wise's business model focuses on providing cost-effective and transparent cross-border money transfers for individuals and businesses. Here are some features of the business model:

Wise plc today

Source - Wise plc Annual Report 2023

  • Low fees: Wise specializes in offering transfers at low and transparent fees. Compared to traditional banks, the costs are typically significantly lower.
  • Real exchange rate: The company uses the real foreign exchange mid-market rate, also known as the interbank exchange rate, without additional markups. This ensures fair and transparent exchange rates for users.
  • Speed: Wise enables fast money transfers, with most transactions occurring within a few hours, often much quicker than traditional banks.
  • International transfers: Wise particularly emphasizes international transfers. The company has developed mechanisms to minimize the complexity and costs of cross-border transactions.
  • Multi-currency accounts: Wise offers multi-currency accounts, allowing users to hold money in various currencies. This facilitates dealing with international business and expenses.
  • Mobile app and online platform: Wise allows users to conduct money transfers through a user-friendly mobile app or online platform, providing flexibility and convenience.

What is the service?

Wise plc offers a variety of services in the international financial transactions sector. The main offerings include international money transfers in various currencies, with the company using low and transparent fees as well as the real foreign exchange mid-market rate to ensure fair exchange rates. In addition to individual transfers for individuals, Wise also allows the opening of bank accounts for individuals, linked with a Debit Mastercard.

Wise plc - Mobile App

Source - Wise

For businesses, Wise provides specific services under the name "Wise Business," including bank accounts and Debit Mastercards. This enables companies to handle international transactions more efficiently and cost-effectively. Additionally, Wise offers an API (Application Programming Interface) that allows other businesses and banks to integrate Wise services into their own platforms. This Wise API facilitates the seamless incorporation of Wise services into various business applications and financial systems.

Who are the customers?

Wise plc caters to a diverse range of customers, spanning from individuals to businesses. The primary clientele of Wise typically includes individuals and companies needing to make international money transfers or exchange currencies. Here are some examples:

  • Individuals: Individuals living, working, or conducting business abroad use Wise to carry out cost-effective and efficient cross-border transfers.
  • Expatriates and Overseas Students: People working or studying abroad benefit from Wise's services to transfer money between different countries or exchange currencies.
  • Freelancers and International Business Professionals: Self-employed individuals, freelancers, and companies operating globally use Wise to receive or send payments in various currencies without incurring high fees.
  • E-commerce Companies: Online retailers and e-commerce platforms can utilize Wise to facilitate cross-border payments and streamline their international business activities.
  • Small and Medium Enterprises (SMEs): SMEs engaged in international business can benefit from Wise's cost-effective currency exchange services and international transfers.
Wise plc - Total number of international migrants

Total number of international migrants | Market growth | Source Wise plc Annual Report 2023

Overall, Wise's services cater to a broad spectrum of customers, all of whom can benefit from the company's transparent and competitive approach to international money transfers and currency exchange.

How is the income realised?

As mentioned earlier, Wise charges significantly lower fees for international money transfers compared to traditional banks. According to Wise's 2023 annual report, the company has a customer base of over 10 million and processed transactions worth more than £105 billion in the same year. However, how does the company generate profits to be economically successful? Here, I will provide an overview of Wise's various revenue streams.

Transaction Fee

The primary source of revenue for the app comes from the fees it charges for money transfers. Users can visit the Wise website, enter the amount they want to transfer, and see how much Wise would charge for their specific transaction. To avoid uncertainties, the app locks in the exchange rate for up to 4 days. The fee varies depending on the transaction currency and starts at 0.43%.

Wise for Business

For business owners who frequently handle payments in various currencies, Wise offers a business account. In addition, physical payments can be processed with a MasterCard. Other features of the Wise business account include account balance tracking, invoice management, and an API for payment automation.

Users do not have to pay for an account, except for a registration fee of £45 (50 euros). However, they will be charged a fee for each cross-border transaction.

Borderless Bank Account

A borderless account with Wise allows users, much like businesses, to open a free bank account. Additionally, they can receive a complimentary MasterCard debit card. Wise generates revenue primarily through currency conversion fees charged to consumers. When users convert currencies while making payments with the debit card or within the account, they incur relevant fees.

Wise API

The Wise API is the backbone of the Wise platform. Companies or banks can choose to integrate Wise into their technical systems to facilitate cross-border payments for their businesses. Wise also earns revenue by licensing its software to other companies.

Wise optimizes its revenue by cleverly monetizing its platform and services, making it one of the most promising fintech startups globally.

Company Strategy

The corporate strategy of Wise plc aims to create an efficient and user-friendly platform for cross-border money transfer and management. The mission of Wise, articulated as "Money without Borders," underscores the objective of making financial transactions across country borders as seamless as possible. The strategy is based on the principles of "Min fees. Max ease. Full speed." – meaning minimal fees, maximum user-friendliness, and maximum speed.

Wise plc market

Source - Wise plc Annual Report 2023

Wise focuses on low and transparent fees to enable cost-effective international money transfers. The emphasis on maximum user-friendliness is reflected in the provision of easy-to-use platforms, both in the form of a mobile app and an online platform. Furthermore, the strategy highlights the speed of transactions, with Wise striving to process money transfers in the shortest possible time.

In summary, Wise's overall strategy aims to provide an innovative, transparent, and efficient solution for international money transfers, allowing individuals and businesses to move and manage funds across borders.


Wise plc has attracted significant investments from renowned tech investors, providing the company with impressive financial backing. Notable investors include Andreessen Horowitz with AH Capital Management LLC, Valar Ventures by Peter Thiel, the Norwegian sovereign wealth fund, as well as personalities like Richard Branson and Max Levchin, co-founder of PayPal, all of whom have invested in Wise Vision.

The major shareholders of Wise, alongside Andreessen Horowitz (8.629%), are the co-founders Kirsto Käärmann (18.23%) and Taavet Hinrikus (7.088%). Additionally, Taavet Hinrikus, through his venture capital firm OÜ Notorious, holds a further 5.726% stake in Wise.

Top 10 Shareholders of Wise plc

Top 10 Shareholders of Wise plc | Source - MarketScreener

Management / Salary

Since the resignation of Taavet Hinrikus in December 2021, the leadership structure of Wise plc has undergone a change. Kristo Käärmann now stands alone at the helm of the company as CEO, having previously served as Chairman alongside Hinrikus. This development marks a new phase in Wise's corporate leadership, with Käärmann as the sole CEO, taking on the responsibility for the strategic direction and management of the company.

The Founder of Wise plc

The Founder of Wise plc | Kristo Käärmann (r.) & Taavet Hinrikus (l.) | Source - Wise Jobs

Before co-founding Wise with Taavet, Kristo worked as a management consultant at Deloitte Consulting and PricewaterhouseCoopers. He collaborated with European banks and insurers to modernise their processes and systems. 

According to Wise's annual report, the total salary of Kristo Käärmann, the co-founder and CEO of the company, in 2023 was £209,000. Interestingly, this amount was more than 60 percent below the salary of Wise's (former) Chief Financial Officer. This significant difference could indicate that the CEO is not solely driven by personal profit. Instead, it suggests a restrained attitude towards his own remuneration, possibly prioritizing the well-being of employees, shareholders, and the overall interests of the company.

An investigation has been initiated against CEO Kristo Käärmann on suspicion of tax evasion. Allegedly, he failed to settle a tax debt of £720,000 with the British government. This incident occurred in 2022, and to date, no conclusive judgment or any other outcome has been reached.

Historical Financial Performance

Share Price

On the 7th of July 2021, the British fintech giant Wise had a solid stock market debut, giving the company a market value of over £8 billion ($11 billion). Wise shares opened on a Wednesday morning at £8 per share and by the market close, they had risen by up to 10% to £8.88. A notable aspect of the money transfer company's IPO was its choice of a direct listing on the London Stock Exchange, a rare method of going public, similar to Spotify's approach in the US in 2018.

Share Price - Wise plc by Yahoo Finance

Share Price in GBX - Wise plc | Source - Yahoo Finance

Since going public, Wise's stock has only known one direction – downwards. One of the reasons was that some Wise employees exercised their right to divest themselves of some of their shares. A much larger issue arose when, a year after the IPO, CEO Kristo Käärmann became the subject of a tax evasion investigation. He failed to settle a tax debt of £720,000 owed to the UK government. There was even speculation about whether he would be allowed to continue leading the company.

On the other hand, the stock price managed to recover in the fiscal years 2023 and 2024, thanks to a favourable business situation.

Let's have a closer look at the Financial Statements; they can provide insights into how well the company is performing.

Financial Statements

Income Statement

Wise plc has been able to demonstrate a remarkable annual revenue growth of an average of 44.1% since its initial public offering. Simultaneously, the high gross profit margin of over 50% suggests that the company may already possess a sustainable competitive advantage. This robust revenue growth indicates a strong market position and underscores the efficiency of Wise plc's business model.

Income Statement 2023 - Wise plc

Income Statement 2023 - Wise plc | Source - Wise plc Annual Report 2023

The improvement in the ratio of interest payments to operating income is noteworthy. What's remarkable for a growth company is that Wise plc has yet to post a loss since its IPO, making it consistently profitable. This is relatively uncommon for young companies. The net margin has significantly increased from 5.0% in 2020 to 28.2% in the first half of the fiscal year 2024. This is another indicator that the company is evolving and building a substantial moat.

Let's now explore what the balance sheet of Wise plc can reveal to us.

Balance Sheet

Typically, for a financial company, Wise plc's balance sheet does not show any items such as inventories or significant investments in property, plant, and equipment (PPE). However, the solid ratio between current assets and current liabilities is striking, particularly due to a substantial cash position. This indicates that Wise is able to effectively cover its current liabilities with current assets, such as cash and cash equivalents.

Balance Sheet 2023 - Wise plc

Balance Sheet 2023 - Wise plc | Source - Wise plc Annual Report 2023

When analysing the balance sheet of Wise plc, it is particularly noticeable that the company has minimal to no long-term debts. This is generally considered a positive sign, suggesting it could be a solid long-term investment opportunity. This observation is also supported by the Income Statement, notably the favourable ratio of interest payments to operating income.

Regarding the equity ratio, a slightly higher percentage, preferably above 10%, may be desirable for a financial company. Nevertheless, it is gratifying to note that the return on equity has increased from 7.6% to 19.8% over four years. This indicates that, despite its relatively young corporate history, Wise plc boasts a robust balance sheet. However, there are still some areas that could be considered for optimization, like the equity ratio for example.

Cash Flow Statement

Let's have a look at how money moves at Wise plc. The cash flow statement is an extremely useful source of information to determine whether the company has a sustainable competitive advantage (Moat). The analysis of capital allocation that can be derived from the cash flow statement is particularly revealing.

Cash Flow Statement 2023 - Wise plc

Cash Flow Statement 2023 - Wise plc | Source - Wise plc Annual Report 2023

Capital Allocation

The long-term return on a capital investment is significantly influenced by the efficient use of generated operational cash flow. This efficiency, in turn, depends on capital allocation, which involves the strategic distribution of cash flow across three essential areas: capital expenditures, dividend payouts, and share buybacks. Diligent attention to these key aspects is crucial to ensure a sustainable and profitable yield for us as investors.

Investing activities & Capital expenditures (CapEx)

Wise plc benefits significantly from the fact that it requires minimal capital expenditures to sustain its profitable business model. These low investment requirements are not only extremely positive for investors, but also for the company itself. By avoiding substantial investments, Wise plc can allocate a considerable portion of its financial resources towards growth and expanding into new markets, including promising regions like China. This financial flexibility allows the company to implement strategic expansion plans and strengthen its presence in emerging markets.

Investing Activities & Capital Expenditures (CapEx) Annual Report 2023 - Wise plc

Investing Activities & Capital Expenditures (CapEx) Annual Report 2023 - Wise plc

Through the strategic investment in the company's growth, Wise will have the opportunity to attract an expanded customer base. This will result in increased utilization of the Wise system, leading to a heightened cash flow. The augmented transactions contribute to more financial resources flowing into Wise's coffers, thereby strengthening the company's financial stability.

Investing Activities & Capital Expenditures (CapEx) Half Year - Fiscal Year 2024 - Wise plc

Investing Activities & Capital Expenditures (CapEx) Half Year - Fiscal Year 2024 - Wise plc

And that's precisely what we as investors are looking for: a company that receives a steady flow of cash and can increase it. A true money-making machine that can also fill our investor pockets with cash, isn't it?


The absence of a dividend payment could indeed be considered a challenge for potential investors in Wise plc. In the current scenario, the company does not distribute profits to its shareholders, but reinvests all earnings internally. This business strategy is quite positively viewed from an economic perspective. The decision to channel profits back into the company allows Wise to pursue further growth and increase returns in the long term. Although this may be less appealing to investors reliant on regular dividend payouts, it could be a sensible strategy for long-term investors focused on value appreciation. However, it remains to be seen whether Wise will change its dividend policy in the future.

Share Buybacks & Shares Outstanding 

Wise Plc Class A has an outstanding number of 1,024,777,200 shares. In contrast to dividend payments and stock buyback programs, the company, for a specific reason, entirely channels its resources into the growth of its business operations. Any available funds are strategically invested in expanding and advancing the company. This strategic approach underscores Wise Plc's emphasis on long-term value creation and innovation, rather than short-term payouts to shareholders.

Return On Invested Capital

The Return on Invested Capital (ROIC) is of paramount importance to me, as it provides insights into how efficiently a company manages its deployed capital. This metric allows for the assessment of a company's ability to generate higher cash flows from the invested capital.

ROIC 2023 - Wise plc

ROIC 2023 - Wise plc | by my own calculation

Wise plc presents varying performance compared to its direct competitor. Western Union and OFX exhibit a notably higher Return on Invested Capital (ROIC) than Wise. Conversely, Wise performs more favourably in comparison to Remitly and PayPal. The ROIC of Wise is just below the benchmark of 10%, providing room for improvement. Hopefully, the company will be able to enhance its profitability in the near future.


After a thorough analysis of the financial statements, I aim to gain a comprehensive insight into the true value of Wise plc. To get a rough overview, I've chosen to initially examine the traditional stock metrics of the last 3 1/2 years, as we have limited historical data. These metrics should provide me with an initial indication of how the company has fared in terms of traditional valuation benchmarks.

In the next step, I plan to employ two different valuation methods: the Discounted Cashflow model and the Owner Earnings method. These approaches are intended to give me a precise insight into the real value of Wise plc and serve as a basis for informed decision-making.

Valuation multiples September 30, 2023 - Wise plc

Valuation multiples September 30, 2023 - Wise plc | by my own calculation

It is evident that the financial indicators suggest that the stock was excessively overvalued during this period. This is particularly conspicuous for a growth-oriented company like Wise plc, as the market holds high expectations for the company and its products and services. A price-to-earnings ratio (P/E ratio) of nearly 50 and a price-to-book value ratio (P/BV) higher than some skyscrapers indicate a significant overvaluation. These metrics imply that the current market price of the stock, in relation to the earnings and book value per share of the company, is considered excessively high.

Discounted Cash Flow Model

Using the Discounted Cash Flow model, I aim to calculate the present value of Wise plc by discounting its future cash flows. The following figure illustrates the Discounted Cash Flow model for Wise plc.

Discounted Cash Flow Model - Wise plc

Discounted Cash Flow Model - Wise plc | by my own calculation

After a thorough analysis and application of the Discounted Cash Flow (DCF) model, an impressive calculation emerges for the intrinsic value per share of Wise plc at the time of this report: a commendable £7.21. Interestingly, the examination reveals that even with a current market price of approximately £8.61, Wise plc's shares are trading at a premium of 16.2% according to the DCF model.

To gain a more comprehensive understanding, let's now explore an alternative valuation method.

Owner Earnings Method

Instead of using Free Cash Flow, I am now employing Owner Earnings as the basis for my DCF calculation to determine the intrinsic value of the stock. This allows for a more precise analysis, as Owner Earnings account for specific adjustments such as capital expenditures and changes in working capital, providing a more accurate assessment of the company's actual profitability. The following DCF model is calculated on the basis of owner earnings.

Owner earnings - Wise plc

Owner earnings - Wise plc | by my own calculation

By incorporating owner's profits instead of free cash flows into the Discounted Cash Flow model, there are differences compared to the previous calculation using free cash flows. The analysis reveals that the determined value is higher than the current market-traded price. The Equity Value per Share stands at £8.99, while the traded price is £8.61, resulting in a discount of just under 4.4%. Which is a very minimal discount and does not indicate a cheap bargain.

Expected Return

For Wise, an annual growth in profit and revenue of 7.5% and 14.3%, respectively, is predicted. The earnings per share are expected to increase by 6.8% per year. The return on equity is projected to reach 18.2% in three years. Personally, I anticipate that if the results continue to evolve as described in the coming years, and with an average expected return of around 12% per annum, a normal case scenario is estimated.

SWOT Analysis

  • Wise plc has an innovative platform that caters to the needs of individuals, businesses, and banks.
  • With over 10 million active users, the company has a solid customer base, indicating strong market demand.
  • The company is led by a competent management team, contributing to effective strategic alignment.
  • The financial stability of Wise plc allows the company to invest in new technologies and continue its development.
  • The company provides top-notch services for individuals, businesses, and banks, highlighting the versatility of its offerings.
  • Challenges in recruiting and retaining talent could impact the company's performance.
  • Personnel costs are high, which may affect the company's profitability.
  • Wise plc has a moderate market share globally, indicating competitive pressure and/or limited market penetration.
  • The financial services market is expanding, and Wise plc has the opportunity to benefit from this growth.
  • Providing API solutions for businesses and banks opens up new business opportunities and strengthens Wise plc's position in the market.
  • Partnerships with companies like N26 or Interactive Brokers can expand Wise plc's influence and services.
  • Competition with traditional banks and other financial service providers could impact Wise plc's margins.
  • Different regulations in various regions could affect the company's business.
  • Data privacy concerns could undermine user trust and lead to legal consequences.
  • The possibility of acquisition could cause internal uncertainty and instability.

When To Buy?

Why I invest in WISE plc

As a techie (nerd), I love digital business models.

Alexander Kelm
Founder of Wall St. Nerd

Wise has developed a business model focused on cost-effective and transparent cross-border money transfers for both individuals and businesses. The fundamental principles of this business model are clear and easily understandable, making it straightforward for investors to comprehend.


Over the past decade, Wise has developed an innovative alternative infrastructure for correspondent banking, allowing for the efficient and cost-effective movement of money across borders. By directly connecting to local payment systems in various countries, Wise can access speed and efficiency. The uniqueness of the infrastructure lies not only in technical aspects but also in the seamless integration of people, processes, regulations, and technologies. This holistic approach gives Wise a competitive advantage and promotes the company's growth.


Wise has minimal to no long-term debts and a robust current ratio, primarily attributed to a substantial cash position. This indicates that Wise is capable of effectively covering its short-term liabilities with short-term assets, such as cash and cash equivalents.


The company's return on equity has significantly improved over a period of four years, rising from 7.6% to an impressive 19.8%. This surpasses the benchmark value of at least 10%. The remarkable increase in return on equity highlights the efficient utilization of retained earnings by the company.


Wise is investing in its existing infrastructure and developing new innovative products and services for this reason. This will enable the company to increase its capabilities and serve its continuously growing customer base more efficiently. Ultimately, this will also generate more money and value for the shareholders.


The top management is primarily led by Co-Founder Kristo Käärmann, who is well acquainted with the industry and possesses extensive knowledge. This expertise will continue to contribute to the enhancement of shareholder value.


Wise has the ability to make price adjustments in line with inflation, thereby protecting its profitability


In my view, Wise plc exhibits some crucial features, including solid financial foundations, competent management, and promising long-term prospects. As a growth-oriented company, it does not aim to buy back its own shares or distribute dividends. Instead, the surplus is strategically reinvested in the business. Personally, I consider this a more sensible approach, as it allows the company to channel its financial resources into further development, rather than using them for expensive share buybacks or dividend payouts.

Fair price

The valuation of Wise plc is more of an estimate of what the market believes the company is worth. As I said, there have been good entry opportunities so far, but at the moment I am leaving my Wise position at Hold and waiting patiently to see what the future may bring.

Final Thoughts

Wise plc, a fascinating company, has established itself as an outstanding alternative to traditional financial service providers. Personally, I have used the platform as a customer, particularly for international transfers to the USA. In comparison to my high street bank, Wise not only offered lower exchange rate fees but also provided a straightforward and fast process.

Whether Wise is a better alternative to PayPal requires a nuanced perspective. Both companies target similar demographics; however, PayPal's primary focus is on facilitating payments in e-commerce, whereas Wise concentrates on cost-effective and transparent cross-border money transfers for individuals and businesses. In this regard, I would say that Wise surpasses PayPal in terms of innovation and cost structures, while PayPal still plays a key role in online payment processing.

Why have I increased my position in Wise since the IPO and continue to hold it? Apart from my positive customer experience, as an entrepreneur and investor, I value digital business models. The decision to invest in Wise is based not only on trust in the company, but also on the insight that it could be a company of similar calibre to the next PayPal. Although I typically do not invest immediately after an IPO, I seized this opportunity as I see the long-term potential of Wise. Despite the usual volatility with young companies, I am holding my position for now and patiently observing what the future holds for Wise.


Holdings Disclosure
I hold a position in Wise.
This article is not intended to be a solicitation for you, the reader, to buy or sell the stock. I wrote this article myself, and it reflects my personal views and opinions. I do not receive any remuneration nor do I have any business relationship with any company whose shares are mentioned in this article.

Legal Disclaimer
I am not a registered investment advisors, brokers/dealers, securities brokers, or financial planners. This article is being provided for informational and educational purposes only and on the condition that it will not form a primary basis for any investment decision. The views about companies and their securities expressed in this article reflect my personal opinions. I do not represent the opinions on whether to buy, sell or hold shares of any particular stock.
None of the information in our articles is intended as investment advice, as an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any security, company, or fund. The information is general in nature and is not specific to you. Wall St. Nerd is not responsible and cannot be held liable for any investment decision made by you. Before using any article’s information to make an investment decision, you should seek the advice of a qualified and registered securities professional and undertake your own due diligence. I did not receive compensation from any companies whose stock is mentioned here. No part of the writer’s compensation was, is, or will be directly or indirectly, related to the specific recommendations or views expressed in this article.

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Hi, I'm [Alexander Kelm]

Founder of Wall St. Nerd

Entrepreneur, value investor and angel investor. Founder of Wall St. Nerd. Join me here on wallstnerd.com to learn how to read financial statements, find healthy companies, and invest your money wisely.


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