On Thursday, Deutsche Bank (ETR:DBKGn) adjusted its price target for Wise (LON:WISEa) PLC (WISE:LN) (OTC: WPLCF), reducing it to GBP8.10 from the previous GBP8.50, while keeping a Hold rating on the stock. The adjustment follows Wise's reported earnings, which highlighted a robust first half of the fiscal year 2025.
Wise demonstrated significant year-over-year growth with a 19% increase in underlying income and a 30% rise in gross profit. The company's underlying profit before tax (PBT) saw an impressive 57% surge to GBP147 million. Notably, Wise's underlying gross profit (GP) and PBT margins exceeded expectations, recording 76% and 22% respectively.
The financial performance of Wise in the first half of the fiscal year 2025 notably surpassed the company's own guidance, which projected PBT margins between 13% and 16%. This outperformance is attributed to Wise's ongoing investments in growth initiatives and the full impact of the price reduction in the first half, which led to an 8 basis points decline in the cross-border take rate in the second quarter of 2025.
Wise's new CFO, Emmanual Thomassin, presented the financial results. Market observers anticipate additional details regarding the company's guidance in future quarters, as Wise continues to navigate its growth strategies and investment impacts.
InvestingPro Insights
Wise plc's (OTC: WPLCF) recent financial performance aligns with several key metrics and trends highlighted by InvestingPro. The company's robust growth is reflected in its impressive revenue growth of 29.89% over the last twelve months as of Q1 2023, surpassing the 19% increase in underlying income reported in the article. This strong performance is further underscored by Wise's high gross profit margin of 80.85%, which supports the reported 30% rise in gross profit.
InvestingPro Tips suggest that Wise is trading at a low P/E ratio relative to its near-term earnings growth, with a PEG ratio of just 0.11. This indicates that the stock may be undervalued considering its growth prospects, which aligns with the company's outperformance of its own guidance. Additionally, the tip noting that Wise's cash flows can sufficiently cover interest payments supports the company's strong financial position and ability to invest in growth initiatives.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips that could provide further insights into Wise's financial health and market position.
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