Looking across my ISA portfolio today, I’d say that Wise (LSE:WISE) is now my favourite UK growth stock. And if one City broker is correct, the share price is set to climb 47% over the next 12 months.
Let’s take a closer look at why most analysts think this stock is currently undervalued.
Transferring money wisely
Before starting the company in 2011, Wise’s two Estonian founders lived in London. One was paid in euros and needed pounds, while the other was paid in pounds and had a mortgage in euros back in Estonia.
Instead of being stung by banks’ hidden mark-up fees on foreign currency transfers, they started swapping money locally through their own accounts at the real mid-market rate.
Put simply, one got the pounds he needed and the other the euros, without money crossing borders. And this simple peer-to-peer hack became TransferWise (now just Wise).
Fast forward 14 years, the company is helping millions of people and businesses move about £170bn across borders each year. And 74% of transfers are now done instantly.
A growing platfrom
Earlier this month, Wise reported solid H1 2026 results (for the six months to 30 September). Active customers grew 18% year on year to 13.4m, while cross border volume jumped 24% to £84.9bn. This translated into 13% growth in underlying income (£749.5m).
Meanwhile, customer holdings exceeded £25bn, jumping 34%. This is good for two key reasons. The first is trust, as people don’t leave money sitting in an app unless they believe it’s safe and worth doing. And second, higher account balances earn Wise more interest income.
As well as more people and businesses sending money abroad through Wise, some of the world’s largest financial institutions are also plugged into its infrastructure. These include Itaú Unibanco (Latin America’s largest bank), Standard Chartered, and Morgan Stanley. And it onboarded Unicredit and Raiffeisen Bank during the period.
However, underlying profit fell 17% as the company chose to invest aggressively in marketing, infrastructure, and more staff to drive growth.
Bullishness
Back in March, JPMorgan Cazenove initiated positive coverage on the stock. It said: “We see a long runway for Wise to continue capturing market share as it further invests in growth, sustaining mid-to-high-teens percentage sales and gross profit growth”.
Earlier this week, the broker assigned a bullish 1,375p price target on the stock. That’s almost 47% above the current level of 937p, as I write. And it’s not alone, as 13 out of 18 analyst teams rate Wise a Buy.
Dip-buying opportunity
Of course, a stock isn’t guaranteed to go up just because analysts like it. And Wise faces lots of competition from fintechs (including Revolut) and legacy banks.
However, the company’s strategy of lowering its take-rate to drive higher usage and capture market share is working. Meanwhile, it’s embedding itself ever deeper into the financial systems of enormous markets like the US, Brazil, India, and Japan.
Long term, I’m as bullish as JPMorgan Cazenove. I think the Platform segment serving large businesses could be a sleeping giant inside Wise. Here, its penetration rate globally is significantly less than 1% today.
With the stock trading at a reasonable valuation at 937p, and down 19% since June, I reckon this is a dip-buying opportunity worth thinking about. I’ve just bought more shares myself.
