• Andres Chocron

WISE stock: At 45% below IPO!

$WISE Stock is an opportunity or not?

Hello everybody! Lets talk about Transferwise or WISE.

I haven't done content in three months, I had a baby BUT today we have a good one. Let's talk about wise. Now, in this atmosphere, in the stock market, this, this half, first half of 2022 was horrible, but there's still a few options I'm buying more than ever in the last few months.

And Wise is a special case because I usually, since October or September of last year, I don't have anything above 30 PE. Okay. But wise I've been dabbling a little bit in the last couple months because WISE is a company that I love. Okay. So first let's talk about what wise does.

Lets cover:

Intro Wise company

WISE is a bank, but better. It's much more than a bank. Look, you open an account in wise and you have through your account, you can have banking details, British balance back in details.

Like if you're in the UK or Europe or, the us, or in Singapore, new. So you can work with people in those areas, in those zones, in those countries, in those currencies, like you're a local. So you can offer a Singapore bank account, a Romanian bank account, and it all goes to your WISE account. Now that's one of three important things with WISE as a product.

The second one is this. You can hold. And change between currencies within your account in 53 currencies. So for example, I work in the us, I work in Switzerland. I work in Spain and I work in Israel and in Singapore I have a client. So I have five currencies that I invoice in now. I don't need to hold Singapore dollars.

I don't need to hold USD cuz I live between Switzerland and Israel. So I just use Swiss francs and Shekels I do like to hold Euro and Dollar just in case, but I don't need it. So with my same wise account, I invoice everybody through in those currencies with those details and I get paid. And then within my, WISE account.

Change between currencies in the same account and the currency exchange rate is better, usually better or equal to what Google gives you so it's very, very good. Now let's go back to where I was showing you here.

53 currencies that you can hold in your account and you can send money to 80 countries. Now they continue to grow the list of countries. You can send money, they continue the list of, uh, currencies that you can. and they continue to grow the list of local account details that you can have within your wise account.

Now. Obviously I, that live and work in different places. It's perfect for me. And I think it's, um, a beautiful, beautiful service. It works flawlessly constantly. So I love it, everybody that I know that uses it loves it. I use it for my personal account uses for, I use it for my business. So now you know why I love it.

And if you didn't know this and you think it might be useful, go ahead and check it. I'm gonna link, um, this not promoter or anything but wise, but I'm gonna leave a link in the description. Now let's see the stock. Cuz one thing is the product. The other thing is the stock. If we check, let's go here in the last month it has gone up what?

53% let's check 54% because today was a good day. Let's check here. 1.3%. That's not much. It's been doing very well in the last, five days, one month maybe, uh, six months is down, but let's remember that. Why is one public in, 2021. At 11 billion.

Now the market capital we can see here is 5.40 wait a second. Five 40. So it's quite a bit down almost 50%. If we check it here, it's down 45.72%. Since the I P O obviously they went out. I'm not saying that the company is undervalued by any stretch of the imagination. I think it's fairly valued.

Now, when I wanted to make this video, uh, a month ago, I thought it was a little. Uh, kind of a bargain because a month ago it was around 350 - 400. It's when I bought and it was, it's been very good, but as it can go, as it goes up, it can go down. So with Ukraine inflation and all of this in September, when the fed raises interest rates, again. We'll probably see all these stocks stumble again. So we might get another opportunity to buy it at under 400, but nonetheless, I love the product. So I wanted to check with you guys. I wanted to show you the fundamentals. Now let's go check them out.

WISE fundamentals

Let's see here. the PE over 150, which is nuts. If you've seen my other videos, I always hate, especially in this atmosphere in the market, over a hundred is nuts. over 30, I don't like, but I made an exception with wise because I love the product. If we check here forward, PE is 64.

It still a lot, but it tells you a little bit of how high is the growth. In fact three year revenue growth rate has been 44.6%, three year be the growth rate, 58.7%. So these numbers are very, very good. And if we check their own website, this is not updated to the latest earnings, but 35% CAGR in volume, of transactions.

Revenue 36% CAGR as well and adjusted EBITDA growth of 22%, 20, 21 to 2022. So that's a lot of growth, in a company. And they've maintained that during this, last two years, very difficult, 2022. Now let's check. And the owners, because something interesting about this company is that when they were created in London in 2011, they got a roaster of the tip top of the venture capitalist. And we're talking about Peter thiel, one of the first investors in Facebook co-founder of Palantir, very, very successful guy. Uh, Richard Branson that I don't need to even, uh, go through his bio Anderson Horwitz, uh, index ventures a lot.

But what I look for in a company that's growing so much is do we see their own people, their employees, their directors, and the founders still have skin in the game, or has it all been sold, when they did the IPO slash SPAC in 2021. So this is what I'm, I'm looking. Uh, the first two Taavet and Kristo they're both the founders.

So in combination and, and Kristo here is the CEO now and Taavet was the first employee of, Skype and was a chairman until recently. And between them two there's 26% of the company, which is a good, good position. Anderson Hollywood still owns 8.63% and you can go through this list and it's a, a who's who off top investment manager. And this is a very interesting one wise PLC employee share trust. They have two point 43% to share between the employees, which is quite a bit.

Now let's go to. The revenue growth. Oh, okay. Income statement. I put it big so you can see it better. It has gone from 117 million to 560 since 2018 to 2022. Uh, a lot of growth on average of 40%, more or less gross profit also around 66% across the board and, uh, and gone up from 77 million to 374 million to better look at this, let's go to their latest earnings and we can see here, for example, revenue, last 2021 to 2022 33% growth, 43% growth and gross profit margin 66.4%, which is good that it, it grew they're incrementing their fees. So that's a good sign and free cash flow is positive, which is, an important, important thing. Now. I mentioned before that they're not really profitable because their earnings per share adjusted is 0.01. So it's very, it's very limited and it can go either way. with these types of companies. Now they're growing, they want from six to 7.4 million clients in total, they divide their services in three, their, personal customers. Like myself, business customers. My company also has a business account in wise, and they also have an API structure that they can, sell to companies to use it for international transactions or transfers.

For example, I mentioned in other videos that I love a bank called number 26. It's my favorite bank in Europe based in Germany. They're amazing. I love them the service. Everything is amazing. Now, when you transfer money with number 26 "N26", they change it as well. N 26 internationally, they use transfer wise.

so that's another revenue source for wise. Now the customers, it's now 7.4. Million customers. That's not that much, but it's a, it's a relatively, small company. They have a lot, a lot of, of room to grow in the last, uh, let me show you here in the last quarter. Well, first a volume per customer. You can see here business, obviously higher than personal, but both growing quite a bit and volume growing.

Wise customers & volume

And let me see if I have it around here. Here it is. Kristo the CEO said in the three months, ending in 30th of June, 2022, the 5 million active customers move more than 24 billion 📍 pounds across borders. A 49%. On last year, that's a 50% increase year over year of transactional volume in the second quarter of the year.

That's a lot, that's a lot. and, um, let's see, we also reached the key miles on intermission more than 50% of all cross border transfers are now completed instantly. That's another thing that I didn't mention before. Usually when I transfer money to an account in the us or Europe, I, I can, even when I press transfer, I see the line going from one end to the screen, to the next.

And it usually takes 10 seconds to get it filled. And then the money is immediately funded in the bank account. TransferWise is another it's in another it's like driving a Tesla after driving a at 1980 Toyota.

Toyotas are good, but Tesla are better. 2022 Tesla. It's just its another ball game. Okay. In general. Where was I? Oh, and I'm doing this video, especially talking about wise now, because I think, everybody should invest. I did, but I did last month. and I'm holding a little bit with a stop loss at, 480. So if they drop eight, 9%, I, it will hit the top left.

Wise deal with Plaid

I'm doing it because they did a partnership. They published a partnership, which they mentioned in this letter. Let me show you here. Oh, I did. When I said four 80, I thought I was showing you this screen.

But anyway, here our personal customers can now link their voice account to over 6,000 finance apps like Venmo, true bill chime in Brazil customers via that 90, 97% of verifications completed within 24 hour.

Okay. Verifications is very important. People getting on board like this very good but this 6,000 finance apps. Okay. So in the end, what happened is they did a deal with, PLAID, plaid is a huge 200 million a year numbers of 2019. So maybe much more it's a unicorn of a startup. If you can call a billion dollar company, a startup, they do.

And, but basically they made wise accounts available to be connected instantly to 6,000 apps that are already using Plaid's API, meaning you can, connect it to Robinhood, Venmo, acorn, for example.

Now, this is very good because you want those high net worth clients to start using wise and wise is such a good product, but they're British. So I'm very happy that they're going into the us with such a partnership. Now that's why I'm doing this, uh, video. Not because I think you should invest immediately or anything like that, but if you didn't know the company, check them out, even if it's as a service, uh, link below.

as an investment, I think it's a company that's gonna grow so much just because I've tried everything. And there's literally nothing like this in the market, the services spectacular, the products they design, everything just works flawlessly. So that's my preferred bank, slash transfer system that I use.

And, and to receive the money from my clients. Every country that I have clients in. So I love it. If, if you know it and you like it, or you hate it, please write it in the comment. I think this company five years into the future is gonna be worth a lot. Now, obviously the market has gone up quite a bit in the last month.

So we see it at 5.4 billion. You know, they, they make 750 million in revenue last. so I think they're not very, very overvalued and they're growing around 40% per year but I wouldn't be surprised if tomorrow or next week or even in the second week of September. we'll get a reality check again, and it will drop in my stop loss. Hopefully it will activate it. And so, but anyway, it's a complicated market, but check it out.

It's a nice company. Tell me what you think. More videos coming. There's a lot of news lately. So I'm gonna try to make a few more this week and that's it. Have a great time. Thank you for tuning in. Leave your comments. Bye.

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