Why Flywire (FLYW) Stock Is Up Today

Petr Huřťák /
2024/02/28 12:13 pm EST

What Happened:

Shares of cross border payment processor Flywire (NASDAQ: FLYW) jumped 26.4% in the pre-market session after the company reported fourth-quarter results that blew past analysts' revenue expectations. The topline results were driven by volume increase due to strong growth in international cross-border payment volumes. Notably, the company observed improved momentum in the education vertical, particularly in the U.K. and from some travel clients. Changes in F.X. rates were also considered a tailwind during the quarter. Looking ahead, its full-year revenue guidance came in higher than Wall Street's estimates, and free cash flow showed a strong trend. On the other hand, revenue guidance for the next quarter missed analysts' expectations. The Canadian government's recent decisions to limit applications for international study permits influenced near-term growth projections, with provinces delaying the allocation of study permits to schools until late Q1 or early Q2. Overall, this quarter's results still seemed positive despite some of the anticipated headwinds, and shareholders should feel optimistic.

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What is the market telling us:

Flywire's shares are very volatile and over the last year have had 21 moves greater than 5%. But moves this big are very rare even for Flywire and that is indicating to us that this news had a significant impact on the market's perception of the business. 

The biggest move we wrote about over the last year was 4 months ago, when the stock dropped 13.9% on the news that the company reported third quarter results, which missed Wall Street's estimates for revenue, EPS, and Total Volume. Management highlighted some challenges during the quarter, including FX headwinds and delayed deployments of solutions in the education and healthcare verticals. In light of these challenges, Flywire narrowed the guidance range for revenue provided for the full year while the upper end of the guidance was lowered. Overall, it was a quarter featuring many negatives with not too much good news to offset the bad.

Flywire is up 26.6% since the beginning of the year, but at $28.76 per share it is still trading 17.9% below its 52-week high of $35.05 from July 2023. Investors who bought $1,000 worth of Flywire's shares at the IPO in May 2021 would now be looking at an investment worth $820.80.

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