Monday, B.Riley analysts adjusted their outlook on Flywire (NASDAQ:FLYW) shares, lowering the price target to $29 from $30 while sustaining a Buy rating. The revision follows a reassessment of the company’s near-term revenue projections, influenced by currency fluctuations, particularly the strengthening of the U.S. dollar against the Canadian dollar, British pound, and Australian dollar. These currencies play a significant role in Flywire's key education market corridors.
The analysts noted that foreign exchange headwinds have slightly affected revenue forecasts but were partly mitigated by the income from Flywire's recent acquisition of Invoiced. They emphasized Flywire's potential to enhance margins by 300 to 600 basis points annually, building upon its already impressive 63.6% gross profit margin. According to InvestingPro analysis, the company maintains strong financial health with a current ratio of 2.33, indicating robust liquidity to support growth initiatives.
Challenges in the Canadian education market, attributed to student visa and housing issues, are expected to present a $30 million revenue obstacle, equating to an 8 percentage point impact on the 2024 income statement. Similar immigration issues have caused a slowdown in the Australian education market. Without these Canadian market difficulties, Flywire was poised for another 30% growth year.
Despite these challenges, B.Riley analysts predict that the Canadian market’s contribution to Flywire’s revenue will decrease to a high single-digit percentage in 2025, down from low double digits in 2023. They anticipate that Flywire's revenue from Canada will remain stable in 2025 compared to 2024.
The report also highlighted that Flywire's healthcare vertical has returned to growth in the third quarter and is expected to maintain this trajectory. Strong revenue growth in the EMEA and APAC regions, as well as in the travel and B2B verticals, continues to propel the company forward, contributing to an overall company-wide growth rate exceeding 20%.
In conclusion, the analysts reaffirmed their positive stance on Flywire, citing the company’s ability to grow revenue by over 20%, increase EBITDA by 83%, expand margins by 500 basis points, and maintain its status as a Rule of 40 company. The new price target of $29 represents approximately a 60% upside from the current levels.
In other recent news, Flywire Corporation has experienced significant growth in its recent financial results. The company's revenue increased to $151.4 million, marking a 29.6% year-over-year rise, while adjusted gross profit grew by 27.2% to $101.9 million. The adjusted EBITDA also rose to $42.2 million, up by $14.7 million from the previous year.
Furthermore, Flywire has made strategic expansions, securing new clients in the travel and healthcare sectors. The company is also exploring growth opportunities in emerging markets, including Latin America and Europe.
Raymond (NS:RYMD) James recently upgraded Flywire stock, citing strong growth and easing headwinds in 2025. Analysts from Stifel also highlighted Flywire's potential for significant growth and margin improvement.
Lastly, Flywire recently announced the appointment of Carleigh Jaques, a former Visa (NYSE:V) executive, to its Board of Directors. These developments underscore Flywire's recent progress and strategic direction.
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