A diversification away from Wise PLC (LSE:WISE)’s core foreign exchange offerings will “drive the next leg of growth”, Barclays analysts said in a Tuesday research note.
Analysts upgraded the London-listed financial technology group, noting this diversification strategy “offers sufficient levers to continue growth” of more than 20% in the mid-term at a roughly 25% margin.
According to Wise’s latest trading update, the proportion of revenue from other services grew to 26% in the fourth quarter of financial 2024 (up from 25% in the third quarter) “as customers used more features, especially the Wise card which represents the majority of this 'other revenue'”.
Wise shares saw a repricing after missing on revenue expectations in the same trading update, but Barclays sees this as an “opportunity to buy a high-quality compounder at a compelling valuation”.
Barclays has a 1,000p price target on the stock against a 793.5p publication price.