Flywire Stock Down 70% From Highs — So Why Did One Investor Add a $10.5 Million Stake?
Key Points
Connecticut-based Ararat Capital Management bought 774,864 shares of Flywire Corporation valued at about $10.5 million in the third quarter.
The move marked a new position for Ararat, which did not report holding Flywire shares in the previous period.
Flywire remains outside the fund's top five holdings.
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Connecticut-based Ararat Capital Management initiated a new position in Flywire Corporation (NASDAQ:FLYW) in the third quarter, adding 774,864 shares worth approximately $10.5 million.
What Happened
According to a filing with the Securities and Exchange Commission dated November 14, Ararat Capital Management disclosed a new position in Flywire Corporation (NASDAQ:FLYW), acquiring 774,864 shares. The stake was valued at $10.5 million as of September 30. This addition occurred as the fund reported total U.S. equity holdings of $186.5 million across 20 positions.
What Else to Know
Flywire now accounts for 5.6% of Ararat’s 13F reportable assets under management, which places it outside the fund's top five holdings.
Top holdings after the filing:
- NYSE:BY: $18.8 million (10.1% of AUM)
- NASDAQ:LZ: $17.8 million (9.5% of AUM)
- NASDAQ:DRVN: $17.7 million (9.5% of AUM)
- NYSE:PLOW: $13.6 million (7.3% of AUM)
- NYSE:GIL: $12.6 million (6.7% of AUM)
As of Thursday, Flywire shares were priced at $13.63, down 38% over the past year and well underperforming the S&P 500, which is up 13% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Market Capitalization | $1.7 billion |
| Revenue (TTM) | $583 million |
| Net Income (TTM) | ($2.4 million) |
Company Snapshot
- Flywire offers a global payment platform and vertical-specific software, enabling cross-border transactions and supporting multiple currencies and payment methods.
- The company serves education, healthcare, travel, and business-to-business clients seeking efficient, secure international payment processing.
Flywire Corporation is a technology-driven payment enablement company specializing in cross-border and complex payment solutions. The firm leverages its proprietary platform and extensive payment network to streamline global transactions for institutions and their customers. With a focus on sectors requiring tailored payment workflows, Flywire differentiates itself through vertical-specific software and direct integrations with alternative payment methods.
Foolish Take
Flywire’s mix of rapid top-line growth and improving profitability makes its addition to a concentrated fund especially noteworthy. Ararat’s new stake comes as the company continues to expand across all four of its verticals, and as Flywire posts unusually resilient fundamentals despite a sharp pullback in the stock since 2021. The fund’s willingness to open a fresh position at depressed levels signals conviction in Flywire’s ability to scale profitably—something many payments peers have struggled to do.
Flywire reported 27.6% year-over-year revenue growth to $200.1 million, alongside adjusted EBITDA of $57.1 million, a margin of 29.4%, up 155 basis points from last year. Total Payment Volume climbed 26.4% to $13.9 billion, and management raised full-year revenue and margin guidance on the back of stronger-than-expected macro conditions. The company added more than 200 new clients.
Ultimately, Flywire seems like it could be a compelling long-term story for investors who can stomach volatility. The business continues to demonstrate growth, expanding margins, sticky vertical integrations, and meaningful operating leverage.
Glossary
13F: A quarterly SEC filing required from institutional investment managers to disclose their U.S. equity holdings.
Assets Under Management (AUM): The total market value of investments managed by a fund or investment firm.
Portfolio Exposure: The proportion of a fund's total assets allocated to a specific investment or sector.
Position: The amount of a particular security or asset held in an investment portfolio.
Quarter-over-quarter: A comparison of financial or operational results between one fiscal quarter and the previous quarter.
Vertical-specific software: Software tailored to the unique needs of a particular industry or sector.
Cross-border transactions: Financial transactions where the buyer and seller are located in different countries.
Alternative payment methods: Non-traditional payment options, such as digital wallets or bank transfers, beyond standard credit cards.
Proprietary platform: A technology system developed and owned by a company, not available for use by competitors.
TTM: The 12-month period ending with the most recent quarterly report.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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