After multiple purchases last year, Wise (LSE:WISE) is now one of the largest holdings in my Stocks and Shares ISA. Today (20 January), the share price spiked 17.3% to 978p.
Let’s take a look at what caused the sudden jump and whether this growth stock still looks good value.
A strong quarter
The reason for today’s rise relates to a strong Q3 FY26 trading update from the money transfer company.
Cross-border volume surged 26% on a constant currency basis to £47.4bn, helping drive underlying income 21% higher to £424.4m. For context, analysts were expecting £46.8bn in cross-border volume and £412.2m in underlying income. So the firm beat expectations.
Active customers grew 20% to 10.9m, up from 7.5m two years before, with customer holdings rising 34% to £27.5bn. Wise Business customers increased 25% to 542,000 as volumes grew strongly (+37%). Again, these figures were ahead of expectations.
Wise delivered 74% of payments instantly, up from 65% the year before, while keeping its take rate steady at 0.52%.
And it was another productive quarter, as it launched a Wise travel card in India, introduced Google Pay for customers in the Philippines (the first non-bank to do so), and secured a conditional licence approval in South Africa.
The firm is now directly integrated into the domestic payment systems of eight countries, including Japan, the Philippines, and Brazil.
Looking ahead, management now expects the full-year underlying pre-tax profit margin to be towards the top end of its medium-term range of 13%-16%. This includes costs related to Wise’s dual listing, which is expected to happen in the first half of 2026.
Our financial performance in Q3 and throughout FY26 has been strong and we remain on track to meet our guidance.
CEO Kristo Käärmann
Risks and valuation
Unsurprisingly, I’m happy with what I read here as a shareholder. The scalable firm is making progress towards its mission of becoming ‘the’ network for the world’s money. Volumes and customers are both trending in the right direction.
The stronger-than-expected uptick in business customers is encouraging, as they obviously move bigger sums of money around than individuals. The long-term opportunity here is huge.
Meanwhile, the listing in the US should increase Wise’s profile further. And it could also see Wise’s valuation rise further.
Currently, the forward earnings multiple is around 26, which some might think is pricey. However, it’s less than Nasdaq-listed rival Remitly Global, which trades at 38 times forward earnings, according to MarketScreener.
Risks worth noting here include rising competition from the likes of Revolut and big foreign exchange swings. Additionally, low-cost stablecoins are set to play a bigger role in transfers, creating a level of uncertainty.
That said, while stablecoins can make moving money faster, messy global regulation makes widespread adoption unlikely for the foreseeable future.
Also, Wise said it could one day reduce its own internal costs by using stablecoins, allowing it to lower fees even further for customers. So, I’m not particularly worried about this, as things stand.
Foolish takeaway
Is Wise stock still worth considering after today’s big rise? I think so, as the firm’s growth engine is humming along nicely and the stock isn’t obviously overvalued.
Sending money across borders is only going to grow in future, while Wise continues to take market share from traditional banks.
