As a new impulse to adopt new advanced technologies across a group of industries, the business world is sweeping, the financial sector is not to be left. In fact, financing and technology have been closely linked to each other, as the first has a great dependence on the latter to provide a set of innovative products and services.
In this regard, there appears to be a race between the various heavyweight names in the financial industry to adopt Stablecoins. Stablecoins is a type of cryptocurrency designed to maintain a stable value, unlike digital digital assets such as Bitcoin (BTCUSD) or ETHEREUM (Ethusd). It is usually linked to the value of one of the backup assets (such as the US dollar, the euro or gold) or sometimes with the support of algorithms that control supply and demand.
Although firm names such as JP Morgan (JPM), Goldman Sachs (GS) and Bank of America (BAC) have already been launched or were in the process of presenting their Stablecoins, where the Stablecoin-Sueer (CRCL) did not have Usdc Stablecoin-Messuer Circle (CRCL).
It seems that the last thing to join the list will be Western Union (WU)
Western Union was founded in 1851, a leading global company in transferring money and financial services, working through a wide network of agents and digital platforms. In the first place, it provides a money services company across the border and work currencies. The maximum market is currently $ 2.7 billion.
Wu shares decreased by 20 % on an annual basis (YTD), with a large distribution return of 11.24 %. This exceeds the average sector of 1.36 %.
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Meanwhile, Western Union plans to make a stablecoin battle as a strategic attack, taking into account its international works to transfer money. About speculation, CEO Divin McGranohan verified this by saying, “We explore the opportunity for us to version Stablecoin, especially in non -American markets.” Also, it is not excluded that it will be obtained by a bigger player in the Stablecoin (Iqra: Circle), McGranahan said, “If someone comes and offered us the appropriate value that we believe that the company deserves, it is clear that we will enjoy it.”
It is worth noting that the company recognized the capabilities of Stablecoins during its profits last month, saying that it aims to use technology to reduce friction and float in border transport, and allow the submission of slopes on the slope and external competitions for encrypted transfers, reduce their dependence on brokers, and to provide encryption capabilities to its digital province.
So, does this make wu stocks “buy?” Well, not really, that is the reason.
For the last quarter, Western Union has not only reported revenues and profits, but also missed unanimity estimates. Quarter revenues fell marginally on an annual basis (YOY) to $ 1.03 billion from $ 1.07 billion. The basic funds transfer work witnessed an annual decrease by 8 % to 885 million dollars, while the Consumer Services Company witnessed a 39 % jump in the same period to 141.1 million dollars.
The profits fell to $ 0.42 per share from $ 0.44 per share in the last year, and street expectations were lost from the share profitability of $ 0.44. It is worth noting that among the past nine quarters, the company has reported to miss profits on three occasions.
In the long run, as well, the trend was frustrated. Revenue has decreased by an annual growth rate of 2.98 % in the past ten years, with profits increased by only 0.54 % in the same period.
However, the image appeared to cash flows more brighter. During the six months ending June 30, Western Union reported the net money of the 147.9 million dollars, compared to only $ 60.2 million in the same period last year. In general, the company closed the quarter with a cash balance of about one billion dollars, which is less than its debt levels of $ 2.7 billion.
Over the full year of 2025, the company expects revenues from $ 4.03 billion to $ 4.14 billion and a quarter of human rights between 1.65-1.75 dollars. While the mid -revenue point will impose an annual decrease by 2.9 %, the same thing for profits indicates a sharp decrease of 38 %.
The CEO of Stablecoin’s launch was not convincing. There was no clear plan, no timetable, and nothing clearer how the company expects to achieve this. It looked like a comfortable comment designed to attract attention and may give the arrow a short -term stumbling block. Western Union has yet to explain whether this is a real product or just an experiment.
Meanwhile, the competition is already. Al -Hakim (Al -Hakim) and Remitly (accreditation) grows quickly, and Paypal (PYPL) has gone one step forward by launching her Stablecoin, Paypal usd (pyusd). These players have the scope and technology to stay in the foreground, putting Western Union in a difficult place.
It is worth noting, on the side of politics, the risks also grow. The recently approved tax bill, known as the “Great and Wormy Voice Law”, has a rate of 3.5 % on the transfers sent by foreign workers abroad, even those who have green cards. This can reduce transactions sharply because most migrant workers are very sensitive to prices. Traditional players such as Western Union, Moneygram and International Money Express may feel more pain than others, because their agent networks are more expensive. In contrast, the first digital companies like Wise and Remit are more flexible and can keep the prices low.
Moreover, there is also a new pressure on compliance. CFPB wants to give clients to give clients clearer details. Once people see exactly what they pay, they are more likely to turn into low -cost services. The average Western Union fee does not seem approximately 8 %, very competition in this light.
Then there is a larger picture. Conflicts, sanctions and geopolitical tensions can be disrupted easily the transfer of money across the border. For a company like Western Union, this is a real gap. The company recognized the same extent in its annual report for 2024:
“The demand for our services can be reduced due to civil disturbances, war, terrorism, and natural disasters, including those related to climate change, public health emergencies or epidemics, and any changes arising from the recent United States elections. From operations and cash flows.“
Consequently, among all these opposite winds, analysts attributed the “mild sale” of the share, with the average target price of $ 8.81, indicating a limited rise in the current levels. Of the 18 analysts covering the arrow, 10 has a “suspension” classification, the other has a “mild sale” classification, and seven have a “strong sale” classification.
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On the date of publication, Pathikrit Bose did not have positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article are only for media purposes. This article was originally published on Barchart.com
