Western Union (WU) AI Stock Analysis

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Western Union

(NYSE:WU)

Rating:72Outperform

Price Target:―

Western Union's financial performance is solid with strong margins and elimination of debt, though challenged by a low equity ratio. Valuation metrics suggest the stock is undervalued, offering a compelling dividend yield. The technical indicators are mixed, with bearish signals yet neutral RSI. The recent earnings call highlighted strategic growth and savings, countered by regional performance issues. Overall, the stock shows potential for value-oriented investors, yet caution is advised due to regional and market challenges.

Positive Factors

Consumer Services Growth

Consumer services segment delivered strong topline growth of +55% year over year and 200 basis points of sequential EBIT margin expansion.

Dividend Support

Western Union's roughly 10% dividend yield is likely to support the stock, and a dividend cut is unlikely in the near term.

Geographic Diversification

Western Union's geographic diversification limits total risk from the proposed tax.

Negative Factors

Excise Tax Proposal

The proposal of a 5% excise tax on remittances could negatively impact Western Union if passed.

Migration Patterns Impact

Weaker trends across North America and LACA amid unfavorable macro and migration patterns introduce risk to FY revenue outlook.

Slower Growth

Western Union is seen as a long-term relative underperformer in Payments due to slower growth and more volatile end market exposures.

Western Union (WU) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$3.11B

Dividend Yield10.1%

Average Volume (3M)6.83M

Price to Earnings (P/E)3.5

Beta (1Y)0.34

Revenue Growth-5.16%

EPS Growth59.60%

CountryUS

Employees9,100

SectorFinancial

Sector Strength81

IndustryFinancial - Credit Services

Share Statistics

EPS (TTM)0.41

Shares Outstanding330,525,330

10 Day Avg. Volume5,809,332

30 Day Avg. Volume6,833,990

Financial Highlights & Ratios

PEG Ratio-2.47

Price to Book (P/B)3.51

Price to Sales (P/S)0.00

P/FCF Ratio8.92

Enterprise Value/Market Cap1.47

Enterprise Value/Revenue0.27

Enterprise Value/Gross Profit3.05

Enterprise Value/Ebitda1.28

Forecast

1Y Price Target

$10.80

Price Target Upside16.13% Upside

Rating ConsensusHold

Number of Analyst Covering13

Western Union Business Overview & Revenue Model

Company DescriptionWestern Union (WU) is a global leader in cross-border, cross-currency money movement and payment services. Operating in the financial services sector, the company provides a broad range of services, including consumer-to-consumer money transfers, business payments, and commercial solutions. With a vast network of agent locations across more than 200 countries and territories, Western Union enables individuals and businesses to send and receive money quickly and securely around the world.

How the Company Makes MoneyWestern Union makes money primarily through transaction fees and foreign exchange margins on money transfers. When a customer sends money through Western Union, the company charges a fee based on the amount sent and the destination country. Additionally, Western Union earns revenue from the difference between the exchange rate offered to customers and the actual rate at which it converts currencies, known as the foreign exchange margin. The company also generates income from its business solutions segment, which provides payment and foreign exchange services to businesses, and from partnerships with financial institutions and retailers that expand its distribution and accessibility. Significant factors contributing to its earnings include its extensive global network, brand recognition, and the growing demand for remittance services in emerging markets.

Western Union Earnings Call Summary

Earnings Call Date:Apr 23, 2025

(Q1-2025)

% Change Since: -8.01%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture, with significant achievements in transaction growth, digital business performance, and strategic expansion in Europe and the Middle East. However, these were offset by challenges in the Americas, particularly due to geopolitical factors and specific market slowdowns. The company's operational efficiency savings and strategic acquisitions provide an optimistic outlook for future growth.

Q1-2025 Updates

Positive Updates

Sustained Transaction Growth

The company achieved its seventh consecutive quarter of above 3% transaction growth, excluding Iraq, Russia, and Belarus, marking a milestone not seen in over a decade.

European Market Strength

Europe experienced strong mid-single-digit revenue growth and double-digit transaction growth, driven by a strategic realignment and new acquisitions like Eurochange.

Branded Digital Business Performance

The digital business showed 14% transaction growth and 8% adjusted revenue growth, marking the eighth consecutive quarter of double-digit transaction growth.

Operational Efficiency Savings

The company saved $30 million in the quarter, bringing total savings to $140 million, exceeding the $150 million target two years ahead of schedule.

Middle East Expansion

The company expanded its presence in the Middle East with new partnerships, including STC and DuPay, and sees the region as a significant opportunity.

Negative Updates

Americas Performance Challenges

The Americas continued to struggle with geopolitical headwinds and slowing migration trends, resulting in lower transaction growth and revenue.

Revenue Decline in Iraq

Adjusted revenue excluding Iraq declined by 2%, with a 100 basis points drag from the difficult comparison against the leap year last year.

Consumer Services Revenue Drop

Consumer services adjusted revenue was down slightly, affected by a double-digit decline in the bill payment business in Latin America and seasonally slow advertising and travel business.

North American Retail Slowdown

North America experienced a 1.5% decline in transactions in Q1, with the retail business facing challenges, particularly in the US to Mexico corridor.

Company Guidance

During The Western Union Company's Q1 2025 earnings call, CEO Devin McGranahan highlighted several key metrics and trends. The company reported $984 million in revenue for the quarter, marking a 2% decline in adjusted revenue when excluding Iraq, with a 3% transaction growth and a 10% cross-border principal growth on a constant currency ex-Iraq basis. The company's branded digital business saw a 14% increase in transactions and an 8% growth in adjusted revenue. Despite geopolitical headwinds in the Americas, where North America and LACA experienced transaction growth declines of about 100 and 200 basis points respectively, the rest of the world, including Europe, the Middle East, and APAC, performed well with double-digit transaction growth. Adjusted earnings per share came in at $0.41, down from $0.45 a year ago. The operational efficiency program yielded $30 million in savings, contributing to a total of $140 million to date, with an expectation to exceed the $150 million target ahead of schedule. The company reaffirmed its 2025 outlook, expecting adjusted revenue of $4.115 billion to $4.215 billion, an operating margin of 19% to 21%, and adjusted EPS between $1.75 and $1.85.

Western Union Financial Statement Overview

Summary

Western Union shows robust profitability and cost control, with strong profit margins and effective cash flow management. The elimination of debt bolsters the balance sheet, though a low equity ratio and slight profitability margin decline pose potential risks.

Income Statement

Positive

Western Union's income statement shows a declining revenue trend over recent years with a slight revenue decrease in TTM. Gross profit margin is strong at approximately 36.1% TTM, indicating effective cost management. However, net profit margin has slightly decreased to 22.1% TTM from 22.2% last year, reflecting challenges in maximizing profitability. Despite these challenges, EBIT and EBITDA margins remain robust at 17.2% and 20.4% TTM, respectively.

Balance Sheet

Positive

The balance sheet indicates a healthy reduction in total debt to zero TTM, significantly improving financial stability. Stockholders' equity has improved, leading to a better debt-to-equity ratio. However, the equity ratio at 11.3% TTM remains relatively low, indicating potential vulnerability to financial fluctuations. Return on equity is strong at 97.4% TTM, showcasing high profitability relative to equity.

Cash Flow

Positive

Cash flow statements highlight solid operating cash flow, though it has decreased from the previous year. The free cash flow to net income ratio is favorable, showing efficient conversion of profits to cash. The company has also managed a positive free cash flow growth rate of -1.97% from the previous year, indicating stable cash management practices.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
4.14B	4.21B	4.36B	4.48B	5.07B	4.83B
	Gross Profit
1.50B	1.59B	1.69B	1.85B	2.17B	2.01B
	EBIT
711.10M	725.80M	817.50M	884.90M	1.12B	967.30M
	EBITDA
843.60M	905.10M	1.03B	1.11B	1.32B	1.22B
	Net Income Common Stockholders
915.00M	934.20M	626.00M	910.60M	805.80M	744.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.13B	3.44B	1.27B	1.29B	1.21B	1.43B
	Total Assets
8.05B	8.37B	8.20B	8.50B	8.82B	9.50B
	Total Debt
2.54B	3.13B	2.67B	2.80B	3.01B	3.07B
	Net Debt
1.41B	1.03B	902.30M	1.51B	1.80B	1.64B
	Total Liabilities
7.66B	7.40B	7.72B	8.02B	8.47B	9.31B
	Stockholders Equity
397.90M	968.90M	479.00M	477.80M	355.60M	186.60M
Cash Flow		Free Cash Flow
361.60M	368.90M	635.30M	373.40M	830.70M	720.70M
	Operating Cash Flow
460.50M	406.30M	783.10M	581.60M	1.05B	877.50M
	Investing Cash Flow
-121.10M	-16.30M	-140.80M	525.50M	192.00M	-113.40M
	Financing Cash Flow
-432.80M	-69.30M	-896.80M	-1.18B	-1.27B	-773.50M

Western Union Technical Analysis

Technical Analysis Sentiment

Negative

Last Price9.30

Price Trends

50DMA

9.83

Negative

100DMA

10.13

Negative

200DMA

10.46

Negative

Market Momentum

MACD

-0.16

Positive

RSI

38.73

Neutral

STOCH

39.96

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WU, the sentiment is Negative. The current price of 9.3 is below the 20-day moving average (MA) of 9.59, below the 50-day MA of 9.83, and below the 200-day MA of 10.46, indicating a bearish trend. The MACD of -0.16 indicates Positive momentum. The RSI at 38.73 is Neutral, neither overbought nor oversold. The STOCH value of 39.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WU.

Western Union Risk Analysis

Western Union disclosed 30 risk factors in its most recent earnings report. Western Union reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 1 New Risks

We may not realize the anticipated benefits from the introduction of new business services, and we may experience disruptions in our Company and our workforce as a result of attempting these initiatives. Q4, 2024

Western Union Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
V	82 Outperform	$709.46B	37.21	50.03%	0.62%	10.19%	12.45%
MA	77 Outperform	$528.46B	40.82	188.92%	0.49%	12.94%	13.22%
PYPL	77 Outperform	$69.37B	16.33	22.20%	―	4.50%	12.82%
WU	72 Outperform	$3.11B	3.49	136.84%	10.10%	-5.16%	59.60%
SOFI	71 Outperform	$15.10B	31.99	7.51%	―	21.24%	―
Sector *	64 Neutral	$12.77B	9.77	7.59%	16985.66%	12.31%	-7.69%

* Financial Sector Average

Performance Comparison

Western Union

9.30

-2.58

-21.72%

Mastercard

585.44

139.38

31.25%

Visa

366.77

91.73

33.35%

PYPL

PayPal Holdings

72.47

5.45

8.13%

SOFI

SoFi Technologies

13.67

6.59

93.08%

Western Union Corporate Events

Executive/Board Changes

Western Union COO Andrew Walker Resigns

Neutral

May 22, 2025

Andrew Walker, the Chief Operations Officer of Western Union, announced his resignation effective June 13, 2025, citing personal reasons. His departure is amicable and unrelated to any operational or policy issues within the company.

The most recent analyst rating on (WU) stock is a Sell with a $12.00 price target. To see the full list of analyst forecasts on Western Union stock, see the WU Stock Forecast page.

Executive/Board ChangesShareholder Meetings

Western Union Stockholders Meeting Highlights Key Decisions

Neutral

May 16, 2025

On May 15, 2025, Western Union held its Annual Meeting of Stockholders, where stockholders elected directors for a one-year term and ratified Ernst & Young LLP as the independent registered public accounting firm for 2025. However, the stockholders did not approve the compensation of the company’s named executive officers, as outlined in the proxy statement.

The most recent analyst rating on (WU) stock is a Sell with a $12.00 price target. To see the full list of analyst forecasts on Western Union stock, see the WU Stock Forecast page.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.