Shares of cross border payment processor Flywire (NASDAQ: FLYW)
fell 13.9% in the morning session after 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.
What is the market telling us:
Flywire’s shares are very volatile and over the last year have had 22 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 6 months ago, when the stock gained 9.5% on the news that the company reported a “beat and raise” quarter. First quarter results exceeded analysts’ revenue, gross margin and earnings per share (EPS) estimates. Revenue guidance for the next quarter was above Consensus, and the full-year revenue guidance was lifted. However, cash burn increased, and adjusted EBITDA guidance was roughly inline. Regardless, it was a strong quarter, with management noting that “it achieved the largest sales quarter in company history, with a record number of clients signed.”
Flywire is down 12.7% since the beginning of the year, and at $21 per share it is trading 40.1% 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 $595.44.
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