On Wednesday, Citi adjusted its price target for Flywire (NASDAQ:FLYW), a leading provider of global payment and receivables solutions, reducing it to $36 from the previous $37, while sustaining a Buy rating on the stock. The adjustment follows a retraction in Flywire's stock price, which had previously surged approximately 38% after the company's fourth-quarter earnings report.
Flywire's stock has recently attracted investor attention due to changes in student visa regulations in Canada, a topic that the company addressed during its earnings call. The clarity of these new rules has now come into focus, raising concerns among some investors about the potential for similar restrictions in other regions. Despite these concerns, Flywire incorporated the full-year impact of this issue into its outlook, prompting Citi to fine-tune its estimates, particularly for the first quarter of the fiscal year, which remain within the company's provided range but are below consensus.
The company is still projected to achieve around 30% revenue growth for the full year 2024, with an anticipated margin expansion of more than 300 basis points, in line with Flywire's consistent full-year guidance. The impact of the Canadian visa rule changes is expected to be partially recoverable in subsequent quarters, and typical student behavior suggests that other regions may help offset the impact.
Citi acknowledges the concerns of investors and an updated weighted average cost of capital (WACC) as reasons for the slight decrease in the price target. Nonetheless, Citi's analysts believe that Flywire's shares remain attractive at their current levels and continue to recommend a Buy rating for the stock.
InvestingPro Insights
In light of Citi's recent adjustment of Flywire's price target, it's crucial to consider some key financial metrics and analyst insights. According to real-time data from InvestingPro, Flywire boasts a market capitalization of $2.92 billion. Despite a challenging past month where the stock price declined by 16.5%, the company has shown a robust revenue growth of 39.3% over the last twelve months as of Q4 2023. This growth narrative aligns with Citi's projection of approximately 30% revenue growth for the full year 2024.
Turning to InvestingPro Tips, analysts have revised their earnings downwards for the upcoming period, which could be a factor in the recent stock price retraction. However, it's noteworthy that Flywire's liquid assets exceed its short-term obligations, providing a cushion for operational flexibility. Moreover, while Flywire was not profitable over the last twelve months, analysts predict the company will turn a profit this year, which may offer a potential upside for investors.
For those seeking a deeper dive into Flywire's financial health and future prospects, InvestingPro offers additional tips, with a total of 7 tips available for Flywire. To access these insights and more, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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