BERLIN (Reuters) – the German payments to the group Wirecard raised its long-term forecasts on Tuesday, but the company’s shares fell and analysts have questioned the ability of a tech company is to give you an accurate forecast for the business over the next five years.
FILE PHOTO: The head office of Wirecard AG, which is an independent provider of outsourcing and white label solutions for electronic payment transactions, is shown in Aschheim near Munich, Germany, April 25, 2019 at the latest. REUTERS/Michael Dalder/File Photo
Wirecard, which has put in place for the provision of digital payment services to both retailers and consumers, it is expected for the processing of a transaction volume of 8 to 10 billion euros ($890 billion a year by 2025 – a walk of about € 100 billion from its previous position.
It is said that the sales could reach 12 billion by the middle of the next decade. That is from an earlier forecast of a 10 billion euro, and six times the revenue of the previous year.
Core earnings before interest, taxes, depreciation, and amortization (EBITDA) is seen at 3.8 billion euros, compared with 3.3 billion previously, while operating cash flow conversion rate would remain unchanged at 65%.
The weather information is presented in a presentation to investors in New York, which means that Wirecard’s business will expand rapidly and focus on the “take rate” – or the commission-the costs of payments to manage, it will be extended to nearly 1.5%.
Wirecard is attributed to the expected acceleration performance of a recent strategic alliance with Softbank, and that has led to a number of the web page that it is working with companies in the Japan tech investor’s portfolio.
“A strong, accelerating organic growth and strong partnerships, including SoftBank, have led the management team in order to provide the key information of the transaction volume, turnover and EBITDA as targeted by 2025,” Wirecard said in a statement issued before the capital markets day will start.
Wirecard’s shares increased in early Frankfurt trading session, but with more than 3% by the end of the day.
Equita analyst Gianmarco Bonacina, described as the ‘ take-rate in support of aggressive in view of the fact that the cost for the basic operations of the processing can be expected to fall within the period of time, and it would have to be compensated by a higher value of service.
THE BULLS AND THE BEARS
Wirecard was founded in 1999, says it has benefited from a boom in online payments, to also act as an acquirer, the payment processing for merchants and an issuer of the real and the virtual payment cards to the consumer.
They were treated for a total of 125 billion euros, in transactions for the 280,000 merchants in the previous year, generating a turnover of € 2 billion. Under long-time CEO, Mark Braun has also won a place in Germany’s blue-chip DAX index and the “buy it” reviewed by 22 out of the 30 analysts who cover the stock.
The average target price amounts to eur 200, it’s significantly higher than Tuesday’s level, up to 140 euros on the Frankfurt stock exchange.
Still, Wirecard, has for years also been a victim of speculators, who are known as the short-sellers, who are suspected of accounting irregularities, and at the same time, seek to take advantage of the decline in the fintech market price of the stock.
“As the night follows the day, Wirecard upgrades for a very long run coaching in the morning from the capital markets day,” said Neil Campling of Mirabaud Securities, which advises investors to “short” the stock.
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Campling said: “the best exporter of fintech, Visa card, and has the confidence to give it more than a one-year outlook.”
Testing has increased this year, as the Financial Times has published a series of reports alleging fraud and false accounting in Wirecard’s office in Singapore and a major Middle East group is not well-controlled.
Wirecard denies the allegations and has taken legal action against the FT., at a landgericht (regional court) Munich (germany). It has also been accused of FT, and to guess what effect the interaction with the short-sellers – the payment is rejected last week by the newspaper’s editor, Lionel Barber.
Reporting by Douglas Busvine. Editing by Jane Merriman