Wise share price popped after earnings. Is it a good buy?
Wise (LON: WISE) share price rose by more than 10% on Tuesday morning after the company published strong quarterly results. The stock jumped to 387p, bringing its total market cap to about 3.50 billion pounds. The shares remain lower by more than 70% from their all-time high.
Wise business defied odds
Wise published its first-quarter results on Tuesday morning. The firm said that the volume if transactions during the quarter jumped by 49% to £24.4 billion from the previous £16.4 billion. As a result, its revenue rose by 51% from £123 million to over £185 million. This strength happened because of the rising number of new customers and the rising traction of its Wise Account and Wise Business products.
Wise also had a strong quarter as the number of customers continued growing. In total, the number of people who transacted using its platform rose to 5 million. Active customers rose by 37% to 4.7 million as the company completed 50% of its cross-border transactions instantly.
Most importantly, the company left its forward guidance unchanged. It expects that revenue will grow by between 30 and 35% this year. It also sees its adjusted EBITDA margin being above 20% in the medium term. In a statement, the firm’s CEO said:
“In the three months to 30 June 2022 we helped 5 million active customers move more than £24 billion across borders, a 49% increase on last year. We also reached a key milestone in our mission, more than 50% of all cross-border transfers are now completed instantly.”
Is Wise a good buy?
Wise share price has taken a hit in the past few months as investors anticipate slower growth as inflation bites around the world. Other fintech companies like Affirm, PayPal, Block, and Remitly have also seen their share prices collapse.
Still, from a fundamental perspective, there is a likelihood that Wise shares will bounce back in the long term. For one, the company is still growing its business even as market conditions worsen. Further, the company has a room to grow its business by adding the number of services. For example, its borderless business has continued thriving.
On the four-hour chart, we see that the Wise stock price has crawled back in the past few days. It has managed to move above the 25-day and 50-day moving averages. The stock has also formed an inverted head and shoulders pattern, which is usually a bullish sign.
Therefore, there is a likelihood that the stock will keep rising as bulls target the key resistance at 400p. A drop below the support at 320p will invalidate the bullish view.
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