Morgan Stanley on Tuesday initiated coverage of Flywire Corporation (NASDAQ:FLYW) with an Equalweight rating and a price target of $15.00. At the time of the note, the shares were trading at $11.24, implying upside to the analyst's target. InvestingPro data referenced in the initiation indicates Flywire appears undervalued under its Fair Value framework.
The firm assigned lead coverage to analyst Michael Infante. Morgan Stanley's outlook incorporates company guidance that assumes visa-related volume headwinds persist in several key markets. Specifically, Flywire models U.S. first-year visas down 30% year-over-year, Canada visas down 10% year-over-year, and flat visa volumes for both the U.K. and Australia.
Based on those assumptions, the company now anticipates roughly 18% growth in revenue less ancillary services for fiscal 2026, a step up from earlier expectations near 14%. Morgan Stanley said in a prior preview dated February 24, 2026 that Flywire's underlying headwind assumptions were sufficiently conservative to allow for potential upside to estimates. In its illustrative case, the firm called for 18% year-over-year growth in revenue less ancillary services.
Morgan Stanley also noted that if the visa assumptions prove conservative, incremental upside to the current revenue less ancillary services outlook would be possible. Separately, InvestingPro Tips included in the coverage note report that sell-side analysts expect Flywire to be profitable this fiscal year, with EPS forecast at $0.87 for fiscal 2026.
Recent operating results provide context for the coverage decision. Flywire posted revenue of $623 million over the last twelve months, a 26.6% increase. The company also released fourth-quarter results that topped consensus estimates. Adjusted earnings per share came in at $0.00 versus a consensus estimate of -$0.01, and quarterly revenue reached $157.5 million compared with expectations of $144.9 million. That quarterly revenue figure represented a 34.0% increase from $117.6 million in the same period a year earlier.
Management attributed the stronger performance to enterprise client wins and continued platform expansion. The contribution from Sertifi, cited as a recent revenue contributor, added $14.2 million and accounted for 12 percentage points of the year-over-year revenue growth. Revenue less ancillary services for the quarter rose 35.3% to $152.7 million from $112.8 million in the prior-year period.
The initiation by Morgan Stanley ties current analyst coverage to both recent operating momentum and a runway of conservative assumptions around visa volumes. Investors tracking Flywire's forward performance will likely focus on how visa volumes and enterprise traction translate into revenue less ancillary services and whether profitability expectations for fiscal 2026 are met.
Key points
- Morgan Stanley began coverage of Flywire with an Equalweight rating and a $15.00 price target; stock trading at $11.24 at the time of the note.
- Company guidance incorporates visa-volume headwinds - U.S. first-year visas assumed down 30% YoY, Canada down 10% YoY, U.K. and Australia flat - and projects about 18% revenue less ancillary services growth for 2026.
- Flywire reported strong recent results: 26.6% revenue growth over the last twelve months to $623 million and a Q4 beat with adjusted EPS $0.00 and revenue $157.5 million.
Risks and uncertainties
- Visa-volume assumptions are a core driver of the outlook; sustained or deeper visa declines in key markets could pressure Flywire's revenue trajectory and forecasts. (Impacts: payments and fintech exposure to cross-border flows.)
- The company and Morgan Stanley are working from illustrative cases and forecasts; deviations from the assumed revenue less ancillary services growth rate would change profitability and valuation outcomes. (Impacts: investor returns and equity valuations in specialty finance/payments names.)
- Analyst profitability projections for fiscal 2026 (EPS $0.87) depend on continued revenue growth and margin performance; failure to sustain recent growth could put those forecasts at risk. (Impacts: market expectations for fintech earnings.)