Voss Capital, LLC, an investment management company, released its third-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 returned +5.0% and +4.9% to investors net of fees and expenses respectively, in the third quarter compared to a +12.4% return for the Russell 2000 Index, +12.6% return for the Russell 2000 Value Index, and +8.3% return for the S&P 500 Index. The Voss Value Master Fund’s total gross exposure stood at 205.4% and the net long exposure was 95.8% as of September 30, 2025. The weight of the fund’s top 10 longs was 77.8% and the top 10 shorts were -43.5%. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its third-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 -0.22%, and its shares lost 39.30% of their value over the last 52 weeks. On December 01, 2025, Flywire Corporation (NASDAQ:FLYW) stock closed at $13.78 per share, with a market capitalization of $1.685 billion.
Voss Capital stated the following regarding Flywire Corporation (NASDAQ:FLYW) in its third quarter 2025 investor letter:
“Our conviction in Flywire Corporation (NASDAQ:FLYW) remains high (~10% position, the largest in the portfolio). The company has gotten back on a “beat and raise” cadence for three consecutive quarters now and we view the ongoing divergence between the company’s fundamentals and its stock price as a significant buying opportunity; while the share price has languished, estimates are moving sharply higher following a ~8% revenue beat in the most recent quarter. The consensus bear case is still chock-full of false fears that international student enrollment caps—similar to recent disruptions in Canada and Australia—will plague Flywire’s largest education markets, the US and UK. However, our variant view suggests these risks remain drastically overpriced. Our analysis shows that even a severe 25% decline in first-year US students would impact total company revenue by only ~2%, and we note that the UK business is actually growing ~40% despite some restrictions having already been in place (they are rapidly taking market share). New integrations with the largest ERP systems that UK universities use is broadening the TAM for their Student Financial Services (SFS) platform, which not only increases the student population using Flywire, but it also adds lucrative new revenue line items like Payment Plans and generally helps with overall student retention. The UK’s ongoing strong growth, with guidance for more, also undermines another Bear point we have heard postured, which is that Flywire is bumping up against its TAM limits and the growth runway is limited. If your most mature market can continue to grow in the 30 40% range, and you are just now moving into the “land” space in many other European markets, we would argue the opportunity to “expand” remains rather robust. Furthermore, the company is finding their operational groove in their other markets as well, with their healthcare business expected to significantly accelerate in 2026 off the back of multiple large contract wins, and their emerging B2B business growing “over 70%” for the second consecutive year.
But wait, there’s more. Flywire is combining their accelerated growth with rapidly improving profitability (Voss Sauce), with incremental EBITDA margins hitting over 40% over the last twelve months. Valued at roughly 3x EV/Gross Profit and under 10x EBITDA (and now 9x our 2027 FCF), FLYW compares favorably to vertical niche payment oriented peers like Toast at 11x. Thus, we believe the risk/reward is still heavily skewed to the upside along with the decent probability that FLYW is a medium-term takeover target.
Flywire Corporation (NASDAQ:FLYW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held Flywire Corporation (NASDAQ:FLYW) at the end of the third quarter, which was 36 in the previous quarter. While we acknowledge the risk and potential of Flywire Corporation (NASDAQ:FLYW) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Flywire Corporation (NASDAQ:FLYW) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Flywire Corporation (NASDAQ:FLYW) and shared Voss Capital’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
