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Western Union (WU)
NYSE:WU
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Western Union
(NYSE:WU)
72Outperform
Positive Factors
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.
Financial Performance
Western Union's geographic diversification limits total risk from the proposed tax.
Negative Factors
Growth Challenges
Western Union is expected to have slower growth compared to most other companies in the coverage universe.
Revenue Outlook
Weaker trends across North America and LACA amid unfavorable macro and migration patterns introduce risk to FY revenue outlook.
Tax Impact
The proposal of a 5% excise tax on remittances could negatively impact Western Union if passed.
Western Union (WU) vs. S&P 500 (SPY)
Market Cap
$3.29B
Dividend Yield9.46%
Average Volume (3M)7.98M
Price to Earnings (P/E)3.7
Beta (1Y)0.33
Revenue Growth-5.16%
EPS Growth59.60%
CountryUS
Employees9,100
SectorFinancial
Sector Strength85
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)0.41
Shares Outstanding330,525,330
10 Day Avg. Volume6,374,285
30 Day Avg. Volume7,979,130
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 Cap1.39
Enterprise Value/Revenue0.27
Enterprise Value/Gross Profit3.05
Enterprise Value/Ebitda1.28
Forecast
1Y Price Target
$10.80Price Target Upside8.65% Upside
Rating ConsensusHold
Number of Analyst Covering12
Western Union Business Overview & Revenue Model
Company DescriptionThe Western Union Company provides money movement and payment services worldwide. The company operates in two segments, Consumer-to-Consumer and Business Solutions. The Consumer-to-Consumer segment facilitates money transfers between two consumers, primarily through a network of third-party agents and sub-agents; and offers international cross-border transfers and intra-country transfers, as well as money transfer transactions through websites and mobile devices. The Business Solutions segment provides payment and foreign exchange solutions, primarily cross-border and cross-currency transactions for small and medium size enterprises, other organizations, and individuals; and foreign currency forward and option contracts. It also offers bill payment services that facilitates payments from consumers to businesses and other organizations, as well as offers money order and other services. The company was founded in 1851 and is headquartered in Denver, Colorado.
How the Company Makes MoneyWestern Union makes money primarily through fees charged for its money transfer services. Customers pay a transaction fee every time they send money, and the company may also earn revenue from foreign exchange margins on currency conversion. Additionally, Western Union generates income from bill payment services, where users pay a fee to facilitate the payment of utility bills and other obligations. The company has strategically partnered with a broad network of agents, including retail locations, banks, and online platforms, to expand its reach and accessibility. These partnerships are crucial as they allow Western Union to tap into a vast customer base and enhance its service delivery. Furthermore, Western Union's digital expansion, including mobile app transactions, provides a growing revenue stream as more customers turn to digital solutions for convenience and speed.
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
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.70
Positive
Balance Sheet
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.65
Positive
Cash Flow
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.75
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| 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
Neutral
9.94
Price Trends
10.15
Negative
10.23
Negative
10.55
Negative
Market Momentum
-0.08
Negative
51.15
Neutral
38.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WU, the sentiment is Neutral. The current price of 9.94 is above the 20-day moving average (MA) of 9.86, below the 50-day MA of 10.15, and below the 200-day MA of 10.55, indicating a neutral trend. The MACD of -0.08 indicates Negative momentum. The RSI at 51.15 is Neutral, neither overbought nor oversold. The STOCH value of 38.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 0 New Risks
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 |
|---|---|---|---|---|---|---|---|
82 Outperform | $708.03B | 37.14 | 50.03% | 0.61% | 10.19% | 12.45% | |
78 Outperform | $50.34B | 10.69 | 28.29% | 1.40% | 9.42% | 128.55% | |
77 Outperform | $529.65B | 40.91 | 188.92% | 0.49% | 12.94% | 13.22% | |
76 Outperform | $70.20B | 16.19 | 22.20% | ― | 4.50% | 12.82% | |
72 Outperform | $3.29B | 3.69 | 136.84% | 9.46% | -5.16% | 59.60% | |
68 Neutral | $15.39B | 33.08 | 7.51% | ― | 21.24% | ― | |
64 Neutral | $12.82B | 9.83 | 7.68% | 17000.34% | 12.38% | -5.56% |
* Financial Sector Average
Performance Comparison
WU
Western Union
9.94
-2.07
-17.24%
DFS
Discover Financial Services
200.05
77.71
63.52%
MA
Mastercard
583.28
126.31
27.64%
V
Visa
365.12
88.59
32.04%
PYPL
PayPal Holdings
72.18
7.41
11.44%
SOFI
SoFi Technologies
13.92
6.73
93.60%
Western Union Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: -1.68%|
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 Corporate Events
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.
Spark’s Take on WU Stock
According to Spark, TipRanks’ AI Analyst, WU is a Outperform.
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.
To see Spark’s full report on WU stock, click here.
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.