Key Morningstar Metrics for Wise
- Fair Value Estimate: GBX 750
- Morningstar Rating: ★★
- Morningstar Economic Moat Rating: None
- Morningstar Uncertainty Rating: High
Transaction Costs Fall For Wise
Wise WISE reported a first-quarter trading update showing 25% growth in cross-border volume and 11% growth in underlying income. The cross-border take rate declined 12 basis points to 52 basis points.
Why it matters: Wise continues to integrate with local payment infrastructures, increasing their speed of currency conversion and reducing transaction costs. The reduction in transaction costs are for the most part passed on to customers to widen the gap between Wise and legacy players on pricing.
- Customer growth of 17% was decent. Wise’s volume growth comes primarily from new customers, as volumes from existing customer cohorts are fairly stable once matured.
The bottom line: We maintain our GBX 750 per share fair value estimate and no-moat rating. Shares are expensive.
