Wirecard: Is It Too Good To Be True?

Jun. 06, 2016 7:45 AM ETWirecard AG (WCAGY), WRCDF16 Comments
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  • Wirecard's fundamentals are outstanding and the company projects to double its revenue and net income by 2020.
  • There's been accusations about Wirecard's acquisitions in Southeast Asia from research companies and hedge funds. The accusations include money laundering, corruption and other illegal activities.
  • Wirecard addressed these accusations in a brief statement, but there are still unanswered questions that needs to be clarified.

Wirecard in brief

Wirecard (OTC:WRCDF) helps companies accept electronic payments. They also issue some of the payment instruments such as cards and mobile payment solutions to provide an end-to-end infrastructure. The business model is basically to enable transactions to be completed between customers and retailers with secure and convenient way. This €5 billion market cap company has 22 thousand customers, 2300 employees and over €45 billion in transactions annually. Revenue is categorized in consumer goods, digital goods and travel & mobility. Some of the customers who use Wirecard's (OTCPK:WCAGY) platforms are: LIDL, Shell, Sky, Microsoft, Orange, Vodafone, AirFrance, Copa Airlines and Enterprise to name a few. They are mainly present in Europe and in Southeast Asia, but they are planning to expand aggressively throughout the world. The CEO Markus Braun stated that they are planning to double the company's size by 2020.

This sort of financial technology space is highly competitive and considered as a hot sector to be in. Looking purely to Wirecard's numbers and going through the annual reports, the company seems like a solid investment but during this spring Wirecard has received bad publicity from hedge funds and independent researchers. Investors who are considering Wirecard should read the allegations and form their own opinion and weigh the risks and rewards. More about the allegations after the company's fundamentals.

Source: Bloomberg


During the past five years Wirecard has been able to execute at an impressive rate, growing revenues at CAGR of 23.71% and net income of 21.5%. In this growth period the company tripled its value and returned five times more than the German performance index, DAX. They have acquired several companies mainly from Asia to complement their fast growing business.

Wirecard has benefited massively from the digitalization in the commerce space. They grew consumer goods transaction volume

This article was written by

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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