UK-listed payments stock Wise (LSE: WISE) has been a brilliant investment recently. Over the last two years, it has climbed from 670p to 984p – turning a £10k investment into nearly £15k.
I reckon this may be the last chance for investors to get in under £10. Because, I’m expecting to see a sharp move higher in the near future and once it pops, I don’t think it’s coming back to current levels.
The potential for significant growth
There are not many stocks on the London Stock Exchange like Wise. Because this is a company that has immense scalability.
Today, Wise is an industry leader in the international payments space, with dominant market positions in Europe and the UK. Yet so far it has captured less than 5% of the global market for personal international payments (and less than 1% of the global small-medium business payments market), meaning that there’s still colossal growth potential.
Add the fact that it’s constantly rolling out innovative new products and solutions (multi-currency accounts, debit cards, business solutions, bank partnerships, etc) and there’s a ton of growth potential here overall. It’s worth noting that last quarter, the company grew its customer count by 17% (to 9.8m) and grew cross-border payment volume by 24%, so it’s quietly growing very quickly.
Top-notch financials
Wise also has incredible financials. Today, it’s a very profitable company. For example, last year it generated a net profit of £417m (up 17% year on year) on revenue of £1,645m (also up 17%).
Its return on capital employed (ROCE) – a key measure of profitability – for the year was 36%. That’s outstanding.
As for its balance sheet, that’s rock solid. At the end of March, it had plenty of cash and minimal long-term debt.
A US listing in 2026
Looking ahead, Wise is shortly about to list in the US. It believes the addition of a primary US listing will help it accelerate its journey to becoming ‘the network’ for the worldʼs money.
I think this could be a major catalyst for the stock. Because it could open up the investor universe significantly.
Ready to explode
Zooming in on the stock, it has been consolidating its gains recently. Since January, it has spent a lot of time hovering between 900p and 1,100p.
This is really healthy share price activity. Not only has it taken the gas out of the balloon (ie the hype) but it has built a base for the next leg up.
To my mind, it’s only a matter of time until we see it go higher. Note that the average analyst price target is 1,250p – about 27% above the current share price.
Of course, there are factors that could derail my bullish thesis. These include a global economic slowdown (leading to less payments activity), loss of market share to competitors, and new disruptive FinTech solutions.
Trading on a forward-looking price-to-earnings (P/E) ratio of 26, however, I think the stock is worth a look. I reckon that in a few years’ time, £10 will be a distant memory.
