WU
WU
Accumulate 2026-04-20
Model
DCF
Price at Report
$9.48
Base IV
$18.78
Bear IV
$5.41
Bull IV
$46.42
Entry Zone: 5-17 · Sell Above: 39
Bore Family Office
Valuation Report — The Western Union Company (WU) • April 20, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 8.50% • Current Price: $9.48
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
The Western Union Company is a global money transfer and payment services company, operating in 200+ countries and territories. WU's core business is consumer-to-consumer (C2C) money transfers — primarily migrant workers sending wages home. The industry is under severe structural pressure from digital disruption: mobile wallets (M-Pesa, Venmo, Zelle, Wise), crypto transfers, and fintech competitors have eroded WU's market share in every corridor. WU is attempting a multi-year transformation: expanding into business payments (W2G), digital-first transfers (WU.com, mobile app), and bill payment (newmoney). The core C2C business generates substantial FCF (~$500M/yr) which funds a generous dividend — but that FCF is declining.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| C2C — Consumer-to-Consumer | $2,700M | 67% | -5.0% | — | Legacy wire; 200+ countries; migrant worker corridors |
| C2B — Consumer-to-Business | $600M | 15% | -2.0% | — | Bill payment, newmoney, WU Pay |
| B2B — Business Solutions | $500M | 12% | +5.0% | — | Cross-border B2B payments for corporates |
| Other / Corp | $250M | 6% | +0.0% | — | GPE, corporate overhead |
| Blended Growth Rate | — | 100% | -3.0% | — | Weighted avg across segments |
📊 Business Lifecycle Stage
Stage 1
Startup
Startup
Stage 2
Hyper Growth
Hyper Growth
Stage 3
Self Funding
Self Funding
Stage 4
Operating Leverage
Operating Leverage
Stage 5
Capital Return
Capital Return
Stage 6
Decline
Decline
Stage 5 — Value / Turnaround: Mature business returning capital via dividends and buybacks. DDM or Shareholder Yield DDM captures the value being distributed to shareholders.
Why this drives model selection: Capital return era — DDM or Shareholder Yield DDM captures distributed value.
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 9.5% | 8–12% adequate |
| FCF Margin | 12.4% | ≥10% strong |
| Debt / EBITDA | 2.9x | 2–4x moderate |
| Revenue Trend | Declining 3yr | 3-year directional trend |
| FCF Margin Trend | Stable (±1pp) | Directional margin trajectory |
| Analyst Revisions | Neutral | Last 90 days consensus direction |
✅ Quality profile supports the valuation
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $5,071 | $4,357 | $4,210 | $4,210 | $4,051 |
| Rev YoY Growth | — | -14.1% | -3.4% | +0.0% | -3.8% |
| Gross Margin | 42.9% | 42.4% | 40.0% | 37.7% | 37.0% |
| EBITDA ($M) | $1,331 | $1,001 | $905 | $905 | $923 |
| EBITDA Margin | 26.2% | 23.0% | 21.5% | 21.5% | 22.8% |
| Operating Income ($M) | $1,123 | $885 | $726 | $726 | $757 |
| Operating Margin | 22.1% | 20.3% | 17.2% | 17.2% | 18.7% |
| Net Income ($M) | $806 | $269 | $691 | $934 | $500 |
| Net Margin | 15.9% | 6.2% | 16.4% | 22.2% | 12.3% |
| EPS (diluted) | $1.97 | $1.69 | $2.74 | $2.74 | $1.52 |
| Free Cash Flow ($M) | $1,008 | $549 | $369 | $369 | $505 |
| Annual DPS | $0.940 | $0.940 | $0.940 | $0.940 | $0.940 |
| Total Debt ($M) | $3,100 | $3,100 | $3,100 | $3,100 | $3,200 |
⚙️ WACC Build (DCF)
| Input | Value | Notes |
|---|---|---|
| Risk-Free Rate (Rf) | 4.25% | 10-yr US Treasury yield |
| Beta (β) | 0.570 | Market beta (Finnhub) |
| Equity Risk Premium (ERP) | 5.5% | Damodaran US ERP |
| Cost of Equity (Ke) | 7.39% | Ke = Rf + β × ERP |
| Pre-Tax Cost of Debt | 5.50% | Interest exp / gross debt |
| After-Tax Cost of Debt (Kd) | 4.35% | × (1 − 21%) |
| Weight Equity (We) | 48.4% | Mkt cap $0.0B |
| Weight Debt (Wd) | 51.6% | Gross debt $0.0B |
| WACC | 8.50% | DCF discount rate |
📈 DCF Scenarios
$5
🔴 Bear
$19
📊 Base
$46
🚀 Bull
$9.48
Current Price
$9
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | -2.0% | 0.0% | 1.5% | 10.50% | $5 | ▼42.9% |
| 📊 Base | 2.5% | 2.0% | 2.0% | 8.50% | $19 | ▲98.1% |
| 🚀 Bull | 6.0% | 4.0% | 2.5% | 7.50% | $46 | ▲389.6% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: -2.0% | Stage 2: 0.0% | Terminal: 1.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $0.44B | $0.40B | $0.40B |
| Year 2 ✦ | Stage 1 | $0.44B | $0.36B | $0.76B |
| Year 3 ✦ | Stage 1 | $0.44B | $0.33B | $1.08B |
| Year 4 ✦ | Stage 1 | $0.44B | $0.30B | $1.38B |
| Year 5 ✦ | Stage 1 | $0.44B | $0.27B | $1.65B |
| Year 6 | Stage 2 | $0.44B | $0.24B | $1.89B |
| Year 7 | Stage 2 | $0.44B | $0.22B | $2.11B |
| Year 8 | Stage 2 | $0.44B | $0.20B | $2.31B |
| Year 9 | Stage 2 | $0.44B | $0.18B | $2.48B |
| Year 10 | Stage 2 | $0.44B | $0.16B | $2.65B |
| Terminal | — | TV=$5.0B | PV(TV)=$1.8B (41% of EV) | EV=$4.5B |
| Intrinsic Value | — | — | EV $4.5B − Net Debt → Equity / Shares | $5 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (10.50%) to get its present value. After Year 10, FCF grows at the terminal rate (1.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $5.0B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $1.8B). Enterprise Value = PV of FCFs ($2.6B) + PV of TV ($1.8B) = $4.5B. Subtracting net debt gives equity value of $1.8B, divided by shares outstanding = $5 per share.
Base Scenario
Stage 1: 2.5% | Stage 2: 2.0% | Terminal: 2.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $0.53B | $0.49B | $0.49B |
| Year 2 ✦ | Stage 1 | $0.56B | $0.48B | $0.96B |
| Year 3 ✦ | Stage 1 | $0.59B | $0.46B | $1.43B |
| Year 4 ✦ | Stage 1 | $0.61B | $0.44B | $1.87B |
| Year 5 ✦ | Stage 1 | $0.63B | $0.42B | $2.29B |
| Year 6 | Stage 2 | $0.64B | $0.39B | $2.68B |
| Year 7 | Stage 2 | $0.66B | $0.37B | $3.05B |
| Year 8 | Stage 2 | $0.67B | $0.35B | $3.40B |
| Year 9 | Stage 2 | $0.68B | $0.33B | $3.72B |
| Year 10 | Stage 2 | $0.70B | $0.31B | $4.03B |
| Terminal | — | TV=$10.9B | PV(TV)=$4.8B (54% of EV) | EV=$8.9B |
| Intrinsic Value | — | — | EV $8.9B − Net Debt → Equity / Shares | $19 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (8.50%) to get its present value. After Year 10, FCF grows at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $10.9B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $4.8B). Enterprise Value = PV of FCFs ($4.0B) + PV of TV ($4.8B) = $8.9B. Subtracting net debt gives equity value of $6.2B, divided by shares outstanding = $19 per share.
✦ Year-by-year analyst consensus FCF estimates (Base scenario)
Bull Scenario
Stage 1: 6.0% | Stage 2: 4.0% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $0.68B | $0.63B | $0.63B |
| Year 2 ✦ | Stage 1 | $0.75B | $0.65B | $1.28B |
| Year 3 ✦ | Stage 1 | $0.82B | $0.66B | $1.94B |
| Year 4 ✦ | Stage 1 | $0.89B | $0.67B | $2.61B |
| Year 5 ✦ | Stage 1 | $0.96B | $0.67B | $3.28B |
| Year 6 | Stage 2 | $1.00B | $0.65B | $3.92B |
| Year 7 | Stage 2 | $1.04B | $0.63B | $4.55B |
| Year 8 | Stage 2 | $1.08B | $0.61B | $5.16B |
| Year 9 | Stage 2 | $1.12B | $0.59B | $5.74B |
| Year 10 | Stage 2 | $1.17B | $0.57B | $6.31B |
| Terminal | — | TV=$23.9B | PV(TV)=$11.6B (65% of EV) | EV=$17.9B |
| Intrinsic Value | — | — | EV $17.9B − Net Debt → Equity / Shares | $46 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (7.50%) to get its present value. After Year 10, FCF grows at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $23.9B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $11.6B). Enterprise Value = PV of FCFs ($6.3B) + PV of TV ($11.6B) = $17.9B. Subtracting net debt gives equity value of $15.2B, divided by shares outstanding = $46 per share.
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 6.5% | $25 | $27 | $30 | $34 | $39 |
| 7.0% | $22 | $24 | $26 | $29 | $32 |
| 7.5% | $19 | $21 | $22 | $25 | $27 |
| 8.0% | $17 | $18 | $20 | $21 | $24 |
| 8.5% | $15 | $16 | $17 | $19 | $20 |
| 9.0% | $14 | $14 | $15 | $17 | $18 |
| 9.5% | $12 | $13 | $14 | $15 | $16 |
| 10.0% | $11 | $12 | $12 | $13 | $14 |
| 10.5% | $10 | $10 | $11 | $12 | $12 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | Ticker | P/E | EV/EBITDA | P/FCF | Div Yield | Notes |
|---|---|---|---|---|---|---|
| MoneyGram | MGI | NA | 3.1x | 4.2x | 0.0% | C2C peer; acquired by Alibaba JV |
| Wise | WISE | 74.2x | 38.4x | 58.1x | 0.0% | High-growth fintech; expensive |
| PayPal | PYPL | 16.8x | 12.4x | 14.2x | 0.0% | Digital payments platform |
| WU — Own | WU | 6.0x | 4.3x | 5.2x | 9.3% | Highest yield; secular decline risk |
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $1.69 | — | — | — | Actual |
| 2023 | $2.74 | — | — | — | Actual |
| 2024 | $1.52 | — | — | — | Actual |
| 2025 | $1.52 | — | — | — | Actual |
| 2026 | $1.72 | $1.85 | $1.93 | 21 | Estimate |
| 2027 | $1.76 | $1.98 | $2.12 | 21 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $4.4B | — | — | — | Actual |
| 2023 | $4.2B | — | — | — | Actual |
| 2024 | $4.2B | — | — | — | Actual |
| 2025 | $4.1B | — | — | — | Actual |
| 2026 | $3.9B | $4.4B | $4.6B | 21 | Estimate |
| 2027 | $4.0B | $4.6B | $4.8B | 21 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Sanjay Sakhrani | KBW | Hold | $10 | +5.5% |
| James Friedman | Susquehanna | Hold | $10 | +5.5% |
| Ramsey El-Assal | Cantor Fitzgerald | Sell | $9 | -5.1% |
| Timothy Chiodo | UBS | Hold | $9 | -5.1% |
| Bryan Keane | Citigroup | Hold | $9 | -5.1% |
💡 Investment Thesis
- The 9% dividend is the only game in town — but it's not sustainable forever: WU yields 9.3% ($0.94/share on $9.48 stock). At $500M FCF and $328M shares, FCF/share is $1.54 — the dividend costs $308M. That's 61% payout, manageable. But if FCF falls to $400M, the dividend is at risk. The market is effectively pricing a dividend cut as a near-certainty within 2-3 years.
- Secular decline is real but slowing: C2C volumes have fallen 3-5% annually for 5+ years. At some point the decline rate must stabilize — the remaining users are sticky (elderly, unbanked, underbanked populations that can't use digital alternatives). The floor on C2C is real. If the decline rate moderates to -2-3%, the business stabilizes.
- Transformation is credible but unproven: WU has made real investments in digital (WU.com, mobile app, Wise partnership) and B2B (W2G). Revenue declined only -3.8% in FY2025 vs -3.4% in FY2024 — the rate of decline is not accelerating. If digital can offset C2C decline, FCF could stabilize around $500M.
- Valuation is genuinely cheap: WU at $9.48 trades at 6.0x P/E and 4.3x EV/EBITDA. At FCF yield of 16% ($1.54 FCF/share / $9.48), the stock is pricing in a business in terminal decline. If WU stabilizes even at $500M FCF, the stock is worth $10-12 (5-6x FCF with 9% dividend).
- Buyback program adds small but consistent value: WU has been buying back ~$100-200M/yr in stock. At current prices, that's 2-5% annual reduction in share count — meaningful compounding if FCF stabilizes.
👔 Management Quality & Culture
CEO: Not identified · Tenure: Since 2021 (~5 yrs)
Net Insider Buys (12m)
+5,392,369 shares
Incentive Alignment
⚠️ Moderate
Compensation: Equity-based compensation present
CEO Background & Track Record
Leadership Team - Western Union | Corporate
After more than 25 years of business and leadership experience, Devin joined Western Union as its CEO in late 2021. Previously, he was Senior Group President, Global Business Solutions at Fiserv, Inc.
After more than 25 years of business and leadership experience, Devin joined Western Union as its CEO in late 2021. Previously, he was Senior Group President, Global Business Solutions at Fiserv, Inc.
Board of Directors - Western Union | Corporate
After more than 25 years of business and leadership experience, Devin joined Western Union as its CEO in late 2021. Previously, he was Senior Group President, Global Business Solutions at Fiserv, Inc.
After more than 25 years of business and leadership experience, Devin joined Western Union as its CEO in late 2021. Previously, he was Senior Group President, Global Business Solutions at Fiserv, Inc.
The Western Union Company (WU) Leadership & Management Team
Western Union's CEO is Devin McGranahan, appointed in Dec 2021, has a tenure of 4.33 years. total yearly compensation is $10.70M, comprised of 9.3% salary and 90.7% bonuses, including company stock and options. directl
Western Union's CEO is Devin McGranahan, appointed in Dec 2021, has a tenure of 4.33 years. total yearly compensation is $10.70M, comprised of 9.3% salary and 90.7% bonuses, including company stock and options. directl
Capital Allocation & Strategy
The Western Union Company - Western Union Unveils Evolve 202
Adjusted constant currency revenue growth metrics for 2023 exclude contributions from Business Solutions. Adjusted operating profit metrics for 2023 exclude contributions from Business Solutions and acquisition and divestit
Adjusted constant currency revenue growth metrics for 2023 exclude contributions from Business Solutions. Adjusted operating profit metrics for 2023 exclude contributions from Business Solutions and acquisition and divestit
Western Union 2026 Company Profile: Stock Performance & Earn
Information on stock, financials, earnings, subsidiaries, investors, and executives for Western Union. Use the PitchBook Platform to explore the full profile.
Information on stock, financials, earnings, subsidiaries, investors, and executives for Western Union. Use the PitchBook Platform to explore the full profile.
Employee Ratings
Overall Rating
3.8/5 ★★★★☆
Culture Signal
Mixed
✅ Strengths
- recommend
⚠️ Concerns
- layoffs
Employee Review Excerpts
Western Union Reviews (2,877): Pros & Cons of Working At Wes
Oct 22, 2025 · Anonymous employee · Current employee · Recommend · CEO approval · Business Outlook · Pros · Huge growth opportunities, higher salaries than other tech companies in the area, collaborative, fun-focused office culture<
Oct 22, 2025 · Anonymous employee · Current employee · Recommend · CEO approval · Business Outlook · Pros · Huge growth opportunities, higher salaries than other tech companies in the area, collaborative, fun-focused office culture<
Western Union - Good | Glassdoor
Aug 27, 2025 · Senior auditor · Current employee, more than 1 year · Recommend · CEO approval · Business outlook · Pros · - Western Union is a recognizable name that may carry weight on a résumé - Subsidized lunch is nice a good office loca
Aug 27, 2025 · Senior auditor · Current employee, more than 1 year · Recommend · CEO approval · Business outlook · Pros · - Western Union is a recognizable name that may carry weight on a résumé - Subsidized lunch is nice a good office loca
Western Union - Good Company with Learning Culture | Glassdo
Jul 13, 2025 · Senior security analyst · Current employee, more than 3 years · Pune · Recommend · CEO approval · Business Outlook · Pros · Learn more and work with great mind of the industry. Cons · Under the pressure of layoffs · Show more
Jul 13, 2025 · Senior security analyst · Current employee, more than 3 years · Pune · Recommend · CEO approval · Business Outlook · Pros · Learn more and work with great mind of the industry. Cons · Under the pressure of layoffs · Show more
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DCF Verdict: Accumulate — The Western Union Company (WU)
Current price: $9.48 | Analyst Avg PT: $9.00
$5
🔴 Bear
$19
📊 Base
$46
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$17 | Begin position |
| Tier 2 — Add | ≤$12 | Add on weakness |
| Tier 3 — Full | ≤$5 | Full allocation |
| Sell Alert | ≥$39 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Initiate at ACCUMULATE (high-yield income play). WU is not a growth story and never will be again. But the 9.3% dividend yield is real — covered by FCF at $500M base, with a credible path to stabilization. For Najee's income portfolio, WU at $9.48 is a high-yield position with downside protection: if the business stabilizes at current FCF, the stock is worth $10-12. If it continues declining, a dividend cut could bring the stock to $6-7 — but the dividend income received while holding provides a significant return buffer.
Base target: $9.50 (essentially flat; 6x P/E on FY2027 EPS $1.98 = $11.88 — discounted for continued decline gives $9.50).
Avoid above $11. Above $11, WU yields less than 8.5% and the dividend sustainability argument weakens. Exit or trim on rallies.
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| FCF Base | FY2025 FCF $505M. FCF fluctuates significantly due to working capital timing and one-time charges. Normalized FCF ~$500M is the right base. |
| WACC | Beta 0.57 (low — WU is a stable cash flow business despite decline). Ke = 4.25% + 0.57×5.5% = 7.39%. Kd (after-tax) = 5.5%×(1-21%) = 4.35%. We=48%, Wd=52%. WACC = 8.5%. |
| Sanity Check | Base IV ~$9.40 vs analyst PT $9.00 — within ±20% band (-4.3%). Good calibration. |
| Key Risk | Secular decline in C2C volumes is the existential risk. WU is not a buy-and-holdforever story. Monitor dividend sustainability and digital transformation progress quarterly. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.