Flywire Stock Down 70% From Highs — So Why Did One Investor Add a $10.5 Million Stake?

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

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.

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.