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Western Union (WU)
NYSE:WU

Western Union (WU) AI Stock Analysis

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WU

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)

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
70
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
65
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
75
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.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
4.14B4.21B4.36B4.48B5.07B4.83B
Gross Profit
1.50B1.59B1.69B1.85B2.17B2.01B
EBIT
711.10M725.80M817.50M884.90M1.12B967.30M
EBITDA
843.60M905.10M1.03B1.11B1.32B1.22B
Net Income Common Stockholders
915.00M934.20M626.00M910.60M805.80M744.30M
Balance SheetCash, Cash Equivalents and Short-Term Investments
1.13B3.44B1.27B1.29B1.21B1.43B
Total Assets
8.05B8.37B8.20B8.50B8.82B9.50B
Total Debt
2.54B3.13B2.67B2.80B3.01B3.07B
Net Debt
1.41B1.03B902.30M1.51B1.80B1.64B
Total Liabilities
7.66B7.40B7.72B8.02B8.47B9.31B
Stockholders Equity
397.90M968.90M479.00M477.80M355.60M186.60M
Cash FlowFree Cash Flow
361.60M368.90M635.30M373.40M830.70M720.70M
Operating Cash Flow
460.50M406.30M783.10M581.60M1.05B877.50M
Investing Cash Flow
-121.10M-16.30M-140.80M525.50M192.00M-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
1.
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
VV
82
Outperform
$709.46B37.2150.03%0.62%10.19%12.45%
MAMA
77
Outperform
$528.46B40.82188.92%0.49%12.94%13.22%
77
Outperform
$69.37B16.3322.20%4.50%12.82%
WUWU
72
Outperform
$3.11B3.49136.84%10.10%-5.16%59.60%
71
Outperform
$15.10B31.997.51%21.24%
64
Neutral
$12.77B9.777.59%16985.66%12.31%-7.69%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
WU
Western Union
9.30
-2.58
-21.72%
MA
Mastercard
585.44
139.38
31.25%
V
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.