Fintech stock nears buy point; Looking profitable this year

Flywire (FLYW) is approaching a buy point following volatile action following its latest earnings report. The fintech stock is Tuesday’s IBD 50 Stocks To Watch pick.

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The global payments and software company serves 3,100 global customers across the education, healthcare and travel industries, as well as business-to-business (B2B) transactions. Flywire covers more than 240 countries and territories and supports over 140 currencies.

Payment functionality includes pay-per-link via a website, email or invoice. A pop-up checkout allows customers to stay on the business owner’s website while paying.

Boston-based Flywire also creates custom billing for global customers, reducing transfer and merchant fees.

The finance share is in ninth place out of 40 shares in the credit card and payment processing group. The group is ranked number 64 out of the 197 IBD industries.

Fintech Stock forms a new base with a point of purchase

Although some stocks are showing buy signals, investors should be cautious about buying. IBD’s current outlook is that the market is in a correction.

The fintech share forms a new base with 29.41 buy points. Shares retook the 50-day moving average and 21-day exponential moving average after two days below the lines a couple of weeks ago. The outbreak of the banking crisis took shares under both lines.

A positive aspect of the base is that the two weeks with the highest volume were up weeks. It is a sign of institutional demand. The relative strength line is also bullish.

FLYW has a high 94 RS rating, meaning it outperformed 94% of the stocks in the IBD database.

Analysts expect a profit this year

The payment company had sales growth of 42% in the fourth quarter, in line with 40% and 53% growth in the previous two quarters.

Flywire’s quarterly loss has narrowed, with a loss of 1 cent per share in the December quarter. The company was listed on the stock exchange on 26 May 2021.

“After a significant year of investment in 2022 that delivered exceptional results, we feel more confident than ever that we can effectively scale our business as we enter 2023,” said CEO Mike Massaro.

Total payment volume increased by 29% compared to the previous quarter. The gross margin in the fourth quarter fell to 56.8% from 59.7% in the same quarter last year.

The company expects Q1 sales in the range of $85 million to $91 million, and full-year revenue of $373 million to $392 million.

Analysts expect the payment processing company to post full-year EPS of 11 cents in 2023, following a loss of 36 cents in 2022, and then grow 190% to a profit of 31 cents in 2024.

More than 350 funds owned FLYW in December, up from 327 in September and 263 in June, showing increasing institutional support.

Follow Kimberley Koenig for more stock news on Twitter @IBD_KKoenig.

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