Goldman Sachs reiterates Buy on Wise: revenue momentum and efficiency improvements support the structural growth thesis

Overview

Goldman Sachs reiterated its Buy rating on Wise after FY26 results, believing the company continues to sustain operating momentum across key KPIs, with FY27 guidance covering both GS and market consensus expectations. The core view of the report is that although the company continues investing in pricing, technology, customer acquisition, and sales capabilities, keeping operating expenses elevated, higher internal transaction efficiency, solid revenue growth, and favorable gross margin dynamics can offset cost pressure, leaving Wise's structural growth thesis intact.

Core views

The main reasons the report is bullish on Wise include: first, core cross-border payments, Wise Account, and Wise Platform form diversified revenue drivers, with upside risk to near- and medium-term revenue growth; second, improved transaction efficiency leads to higher gross margin assumptions of approximately 82%-84% for FY27-FY31; third, although operating expenses remain high, their growth is expected to slow after FY27, with PBT margin forecasts broadly stable; fourth, the platform business pipeline is strong, and ramp-up from existing clients supports mid-term guidance; fifth, after the recent share price pullback, valuation appears more attractive, and reverse DCF suggests the market is only implying about 9% revenue growth over the next decade.

Analysis framework

The report uses frameworks including post-results forecast updates, comparison of company guidance with market consensus expectations, DCF valuation, reverse DCF stress testing, and the Goldman Sachs Factor Profile. The analysis focuses on revenue growth, take rate, net interest income, gross margin, operating expenses, PBT margin, and buyback impact.

Methodology notes

• Valuation methodDCF valuation

  Estimate the 12-month target price by discounting cash flows

  Wise's target price is based on the DCF method, with key parameters of WACC 11.2% and a long-term growth rate of 3.5%, resulting in 12-month target prices of WSE US$19.50 and WISEa.L 1,450p.

• Valuation cross-checkReverse DCF

  Back out the long-term revenue growth expectations implied by the current share price

  The report states that the current market price implies revenue growth of about 9% over the next decade, which Goldman Sachs considers not demanding, supporting its view that the valuation is attractive.

• Factor frameworkGS Factor Profile

  Compare stock characteristics across growth, financial returns, valuation multiples, and integrated factors

  The Goldman Sachs Factor Profile uses standardized rankings to compare Growth, Financial Returns, Multiple, and Integrated characteristics, helping position the stock relative to the market and industry peers.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• WISE GROUP PLC (WSE.US / WISEa.L)

  Core covered name; the report reiterates a Buy rating and raises the target price.

  Strengths

  Strong positioning in low-cost cross-border payments, with a solid technology stack and product value proposition; revenue drivers come from core cross-border payments, Wise Account, and Wise Platform; improved transaction efficiency supports gross margin; and a large and growing customer deposit base provides a tailwind to interest income.

  Weaknesses

  The company remains in an ongoing investment phase, with spending on pricing, technology, customer acquisition, and sales capabilities keeping operating expenses at a high level.

  Comparison

  The report says Wise's revenue growth is expected to exceed the average level of other payments/fintech companies covered by Goldman Sachs, with the rating positioned relative to companies such as Adyen, Nexi, and Worldline in its coverage universe.

  Risks

  Macro, slower penetration of digital cross-border payments, execution risk, FX, competition, regulation, compliance, cybersecurity, chargebacks, and crypto-related risks.

Key data

• RatingBuy (on CL)Buy rating reiterated after FY26 results.
• 12-month target priceWSE: US$19.50; WISEa.L: 1,450pPreviously US$19/1,400p, raised this time due to forecast revisions.
• FY27 net revenue growthApproximately 18% YoY (excluding FX)Revenue forecasts are broadly unchanged, with only minor adjustments to take rate and net interest income assumptions.
• FY27-FY31 gross marginApproximately 82%-84%Gross margin assumptions are raised, reflecting improved transaction efficiency.
• FY27 operating expense growthApproximately 29% YoYHigher than the previous assumption of approximately 23% YoY; then slows to approximately 22% over the rest of the forecast period.
• FY27 PBT marginApproximately 25.3%Despite higher operating expense assumptions, overall PBT forecasts are broadly unchanged.
• FY29-FY31 PBT forecast revisionRaised by approximately 3%-7%Driven by gross margin and efficiency improvements.
• Valuation multiplesCY27E EV/Net revenue approximately 2.5x, EV/EBITDA approximately 10.1x, P/E approximately 20.7xThe report believes valuation is attractive after the recent share price decline.
• 2026-2031E CAGRNet revenue/EBITDA/PF EPS approximately 21%/20%/15%, respectivelyReflects the report's expectations for mid-term growth and earnings expansion.
• BuybackUS$500mn buyback announced, of which approximately US$300mn is for incremental buybacksThis buyback arrangement is reflected in the forecasts.

Impact & implications

If Goldman Sachs's view plays out, Wise's investment thesis will expand from pure revenue growth to a combination of revenue momentum, platform business ramp-up, and improving internal efficiency. Higher operating expenses may weigh on market sentiment in the short term, but if growth accelerates in 1H FY27, gross margin stays elevated, and new platform clients continue to be added, there could be substantial room for share price re-rating.

Risks

• A deterioration in the macro environment could affect cross-border payment volumes and consumer activity.
• The shift toward digital cross-border payments may proceed more slowly than expected.
• Execution challenges or organizational and operational issues arising from rapid expansion.
• FX volatility could affect revenue, costs, or valuation.
• Intensifying competition in payments and fintech.
• Changes in regulatory requirements or compliance issues could bring costs and business restrictions.
• Cybersecurity incidents could damage customer trust and business continuity.
• Chargeback risk and crypto-related uncertainties.

What to watch

• 1QFY27 trading update on July 16, 2026, where the report expects 1H27 may show faster growth.
• Whether FY27 revenue growth approaches or exceeds the expected approximately 18% YoY (excluding FX).
• Whether operating expense growth gradually slows from about 29% in FY27.
• Whether FY27-FY31 gross margin can remain around 82%-84%.
• Wise Platform client ramp-up and announcements of new platform clients.
• Whether the Wise Connect New York event releases news of new platform business wins.
• Buyback execution progress and its impact on per-share metrics.