Voss Capital's New Long Addition: Flywire Corporation (FLYW)

Voss Capital, LLC, an investment management company, released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. Voss Capital’s funds, Voss Value Fund, LP, and the Voss Value Offshore Fund, Ltd both returned -7.3% to investors net of fees and expenses respectively, in the first quarter compared to a -9.5% return for the Russell 2000 Index, -7.7% return for the Russell 2000 Value Index, and -4.3% return for the S&P 500 Index. The Voss Value Master Fund’s total gross exposure stood at 162.1% and the net long exposure was 70.4% as of March 31st, 2025. The weight of the fund’s top 10 longs was 65.9% and the top 10 shorts were -36.9%. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its first-quarter 2025 investor letter, Voss Capital highlighted stocks such as Flywire Corporation (NASDAQ:FLYW). Headquartered in Boston, Massachusetts, Flywire Corporation (NASDAQ:FLYW) is a payments enablement and software company. The one-month return of Flywire Corporation (NASDAQ:FLYW) was 18.30%, and its shares lost 25.92% of their value over the last 52 weeks. On July 2, 2025, Flywire Corporation (NASDAQ:FLYW) stock closed at $11.83 per share, with a market capitalization of $1.438 billion.

Voss Capital stated the following regarding Flywire Corporation (NASDAQ:FLYW) in its Q1 2025 investor letter:

"We recently initiated a ~5% long position in Flywire Corporation (NASDAQ:FLYW) and own ~5.6% of the company. FLYW is a capital-light cross-border payments and software platform trading closer to a secular decliner than a structurally advantaged niche leader in education, travel, and healthcare. The company’s original niche was to allow seamless cross border payments options for students studying abroad. This cross-borders niche soon developed into a more holistic payments platform that could process all financial transactions at universities, expanded from US schools to Canada, Australia, the UK, and other European countries while simultaneously adding more pure software revenue streams to upsell. Flywire then took its cloud payments/software platform to a few other “big ticket” payment niches such as exotic travel, B2B, and healthcare to create what is becoming a more diverse business that is still united by a common payments and software infrastructure.

Our core thesis is three-fold: 1. Despite short term disruptions, study abroad programs are not in secular decline and will normalize, likely in 2026 2. Flywire has significantly better technology and execution than peers and will rebound decisively when the macro steadies 3. The company has quickly broadened their revenue base beyond cross-border tuition payments and will be more insulated from any future disruptions going forward

Flywire IPOed out of the gate at over 20x NTM sales in 2021 and is now under 2x NTM sales despite (up until recently) consistently growing at over 20% with rising margins. So, what happened? Although the ongoing derating has been a brutal grind downwards, their Q4 2024 report resulted in a real implosion in the stock as the company guided materially below consensus (12% growth versus consensus closer to 20%) while simultaneously making an expensive, significantly dilutive acquisition (Sertifi) that blew half their cash balance, a real double whammy..." (Click here to read the full text)

Flywire Corporation (NASDAQ:FLYW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held Flywire Corporation (NASDAQ:FLYW) at the end of the first quarter, which was 34 in the previous quarter. While we acknowledge the potential of Flywire Corporation (NASDAQ:FLYW) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Flywire Corporation (NASDAQ:FLYW) and shared Renaissance Investment Management Small Cap Growth Strategy's views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of FLYW as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.