What the new KnowBe4 deal means for Flywire stock

Flywire (FLYW) just signed a three year agreement to become KnowBe4’s preferred partner for global accounts receivable and international payments, tying its platform to millions in committed annual payment volume.

Despite the KnowBe4 agreement, Flywire’s recent price action has been mixed, with a 19.3% 1 month share price return but a small decline year to date. The 1 year total shareholder return of 51.6% contrasts with a 3 year total shareholder loss of 53.6%, suggesting momentum has recently picked up after a tougher stretch.

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With Flywire trading at $13.55, an indicated intrinsic discount of about 30% and a 1 year total return above 50% already on the board, investors may need to ask whether there is still a buying opportunity or if future growth is already priced in.

Most Popular Narrative: 16.9% Undervalued

At $13.55, the most followed narrative pegs Flywire’s fair value at $16.31 using a 7.2% discount rate, framing the recent KnowBe4 deal within a broader growth story.

Ongoing investment in proprietary technology, AI driven automation, and integration capabilities is yielding significant platform efficiencies (e.g., 25% operational cost improvements, 90% automated payment matching, and 40% automated customer service). These efficiencies underpin Flywire's ability to maintain or increase net margins and deliver stronger earnings leverage as scale increases.

Curious what kind of revenue trajectory and margin lift need to line up for that valuation to make sense? The full narrative spells out a very specific earnings path, share count assumptions, and a future profit multiple that has to hold up for Flywire to meet that fair value.

Result: Fair Value of $16.31 (UNDERVALUED)

However, student visa pressure in key education markets, along with higher competition from fintechs and incumbents, could still cap Flywire’s growth and compress margins over time.

Another Way to Look at Value

The first narrative leans on future cash flows and earnings power to argue Flywire looks around 16.9% undervalued versus a fair value of $16.31. The current P/E of 121.7x, compared with a fair ratio of 22.7x and a US Diversified Financial industry average of 16.9x, tells a very different story that points to rich expectations and less room for error.

When a company trades at a multiple more than 5x both peers and its own fair ratio, even strong growth forecasts leave a lot of future success already reflected in the price. In that case, the real question is which signal you trust more: the earnings runway or the valuation gap.

Next Steps

With mixed signals on valuation and growth, it helps to pressure test the story yourself and decide quickly where you stand on Flywire. To weigh up both sides in one place, take a closer look at the 4 key rewards and 1 important warning sign

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.