Financial Analysis: Flywire (NASDAQ:FLYW) versus WEX (NYSE:WEX)

Flywire (NASDAQ:FLYW) and WEX (NYSE:WEX) are both mid-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, valuation, analyst recommendations, institutional ownership and dividends.

Insider & Institutional Ownership

92.6% of Flywire shares are owned by institutional investors. Comparatively, 97.5% of WEX shares are owned by institutional investors. 5.0% of Flywire shares are owned by company insiders. Comparatively, 1.1% of WEX shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations for Flywire and WEX, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flywire	0	1	12	1	3.00
WEX	0	5	6	0	2.55

Flywire presently has a consensus price target of $34.79, suggesting a potential upside of 74.89%. WEX has a consensus price target of $219.54, suggesting a potential upside of 27.90%. Given Flywire’s stronger consensus rating and higher possible upside, analysts clearly believe Flywire is more favorable than WEX.

Profitability

This table compares Flywire and WEX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Flywire	-2.92%	-1.96%	-1.51%
WEX	10.80%	32.16%	4.24%

Earnings and Valuation

This table compares Flywire and WEX’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Flywire	$289.38 million	7.71	-$39.35 million	($0.11)	-180.80
WEX	$2.50 billion	2.93	$201.44 million	$6.20	27.69

WEX has higher revenue and earnings than Flywire. Flywire is trading at a lower price-to-earnings ratio than WEX, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Flywire has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500. Comparatively, WEX has a beta of 1.6, suggesting that its share price is 60% more volatile than the S&P 500.

Summary

WEX beats Flywire on 9 of the 15 factors compared between the two stocks.

About Flywire

Flywire Corporation, together with its subsidiaries, operates as a payments enablement and software company in the United States and internationally. Its payment platform and network, and vertical-specific software help clients to get paid and help their customers to pay. The company's platform facilitates payment flows across multiple currencies, payment types, and payment options; and provides direct connections to alternative payment methods, such as Alipay, Boleto, PayPal/Venmo, and Trustly. It serves education, healthcare, travel, and business to business organizations. The company was formerly known as peerTransfer Corporation and changed its name to Flywire Corporation in December 2016. Flywire Corporation was incorporated in 2009 and is headquartered in Boston, Massachusetts.

About WEX

WEX Inc. operates a commerce platform in the United States and internationally. The Fleet Solutions segment offers fleet vehicle payment solutions, transaction processing, and information management services. It also provides account and account retention services; authorization and billing inquiries, and account maintenance services; account management; credit and collections services; merchant services; analytics solutions; and ancillary services and tools to fleets to manage expenses and capital requirements. This segment markets its products directly and indirectly to businesses and government agencies with fleets of commercial vehicles; and indirectly through co-branded and private label relationships. The Travel and Corporate Solutions segment provides payment solutions, including embedded payments; and accounts payable automation and spend management solutions. Its products include virtual cards that are used for transactions where no physical card is presented. This segment markets its products directly and indirectly to customers in travel, fintech, insurance, consumer bill pay, and media verticals, as well as businesses and financial institutions. The Health and Employee Benefit Solutions segment offers software-as-a-service (SaaS) platform for consumer directed healthcare benefits and full-service benefit enrollment solutions. Its SaaS platform includes embedded payment solutions and plan administration services for consumer-directed health benefits; COBRA accounts; and benefit enrollment and administration services. This segment also provides custodial and depository services for health savings accounts; and payroll-related benefits. This segment markets its products through third-party administrators, financial institutions, payroll providers, and health plans. The company was formerly known as Wright Express Corporation and changed its name to WEX Inc. in October 2012. WEX Inc. was founded in 1983 and is based in Portland, Maine.