Western Union (WU, Financial) has announced its financial results for the first quarter, reporting revenue of $983.6 million. This figure falls short of analysts' expectations, which were set at $991.38 million. Despite this revenue miss, the company has marked its eighth consecutive quarter of double-digit transaction growth within its Branded Digital segment, indicating ongoing momentum in this area.
President and CEO Devin McGranahan emphasized the company's commitment to its Evolve 2025 strategy. This initiative focuses on expanding financial services access to populations with growing financial aspirations globally. McGranahan expressed confidence that this strategy will enhance revenue growth and create lasting value for shareholders as the year continues.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 13 analysts, the average target price for The Western Union Co (WU, Financial) is $11.62 with a high estimate of $15.00 and a low estimate of $9.00. The average target implies an upside of 14.89% from the current price of $10.11. More detailed estimate data can be found on the The Western Union Co (WU) Forecast page.
Based on the consensus recommendation from 19 brokerage firms, The Western Union Co's (WU, Financial) average brokerage recommendation is currently 3.4, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for The Western Union Co (WU, Financial) in one year is $13.21, suggesting a upside of 30.66% from the current price of $10.11. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the The Western Union Co (WU) Summary page.
Key Business Developments
Release Date: February 04, 2025
- Fourth Quarter Revenue: $1.60 billion.
- Adjusted Revenue Growth (Excluding Iraq): 1.4%.
- Consumer Services Adjusted Revenue Growth: 23%.
- Branded Digital Business Transaction Growth: 13%.
- Adjusted Earnings Per Share (EPS): $0.40, up $0.03 from the previous year.
- Full Year GAAP Revenue: $4.2 billion.
- Full Year Adjusted Revenue Growth (Excluding Iraq): 0.5%.
- Full Year Adjusted EPS: $1.74.
- Fourth Quarter Adjusted Operating Margin: 17%.
- Full Year Adjusted Operating Margin: 19%.
- Operating Cash Flow (2024): $406 million.
- Capital Expenditures (2024): $131 million.
- Shareholder Returns (2024): $500 million, including $318 million in dividends and $177 million in share repurchases.
- Cash and Cash Equivalents: $1.5 billion.
- Debt: $2.9 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The Western Union Co (WU, Financial) reported a third consecutive quarter of positive adjusted revenue growth, excluding Iraq, with a 1.4% increase.
- Consumer services showed strong performance with 23% adjusted revenue growth, driven by media network business and expansion of foreign exchange services.
- The branded digital business experienced 13% transaction growth and 8% adjusted revenue growth in the quarter.
- The company achieved a significant non-cash tax benefit exceeding $250 million, positively impacting GAAP EPS.
- The Western Union Co (WU) is ahead of its evolve 2025 strategy, achieving positive full-year companywide adjusted revenue growth, excluding Iraq.
Negative Points
- North American revenues experienced a modest deceleration, with macroeconomic impacts affecting performance.
- Retail business, excluding Iraq, was down about 3% year over year, indicating challenges in stabilizing this segment.
- The company faces uncertainty in the market, with potential impacts from macroeconomic conditions and geopolitical factors.
- The digital business continues to face a gap between transaction growth and revenue growth, with a 300-400 basis point difference.
- The Western Union Co (WU) anticipates headwinds in the first and second quarters of 2025 due to lower revenues from Iraq.
