Wisr Limited (Australia: WZR.AX) – last price 2.1c – ~A$37mm market cap

Thesis summary: WZR is a left-for-dead Australian fintech lender that has quietly executed a textbook operational turnaround, and the market, at $37mm market cap, simply hasn’t got around to it yet. This is not a traditional Raper Capital asset play: at ~1x book there is no discount to net assets to hide behind, and if that is your lens you will look at WZR momentarily and then move on (as, evidently, most everyone has). But despite this the story is highly attractive. WZR constitutes a ~$1 billion, growing, prime-quality loan book that just crossed into profitability, and if current trends – strong origination growth, ~5.2% NIM, ~1.4% net losses, single-digit opex growth – simply persist, I estimate the business will earn ~$10mm of Cash NPAT in FY27 and ~$20mm in FY28, against a $37mm market capitalization. That is ~3.6x and ~1.8x one- and two-year-out earnings, for a business compounding its book at 25%+ – very cheap indeed against the 6-10x Cash NPAT that scaled Australian non-bank lenders command (a multiple range that itself remains discounted).

Beyond the standalone math, WZR is, to my mind, a prime consolidation candidate: the enterprise is subscale as a public company, the register has turned over almost entirely into the hands of financial owners who will prioritize near-term value over independence, and there is at least one obvious, highly accretive merger partner sitting one ASX ticker away (Solvar, analyzed herein) – who could afford to pay a 100% premium to current and still get a massively accretive, synergistic deal here.

I own a position, and I intend to engage constructively to maximize value in the context of these opportunities as the company continues to grow. One important housekeeping note: FY26 results are due next week, so it is probably worth waiting for those numbers – and the discussion around them – before considering this more closely.

Background: from near-death to a $1 billion book

Wisr listed in the heady fintech era as a ‘neolender’ – prime/near-prime personal loans and secured vehicle loans, originated digitally and through brokers, funded via warehouses and ABS – and did what most all of that cohort did: grew fast, lost money, and got taken to the woodshed when rates ripped in 2022-23. The book peaked, then shrank for the better part of two years as management (a new team under CEO Andrew Goodwin, the former CFO) deliberately choked originations to preserve capital, cut costs, and fixed the funding stack. The stock went from 30c+ in the 2021 froth to ~1.5c – a >95% drawdown – and, as far as I can tell, the market stopped watching entirely somewhere around 2024.

Before covering the turnaround in detail, it is worth being precise about what Wisr actually does, because ‘fintech lender’ covers a multitude of sins and Wisr’s niche is the better end of the spectrum. Wisr writes prime and near-prime consumer credit: the average loan is ~$35.5k, the weighted average Equifax score of the book is ~808, and the mix is currently ~64% personal loans / ~36% secured vehicle loans, with the auto share rising fast. These are, in the main, employed Australians consolidating debt or buying a car – not payday-adjacent deep sub-prime borrowers.

There is a strong structural tailwind helping most all non-bank lenders in Aussie financials, as many of the major banks are pulling back from this market. The majors’ share of personal and secured vehicle lending has fallen from 73% in June 2020 to 58% in June 2025, two of the big four have exited secured vehicle lending altogether, and the banks’ strategic focus has narrowed relentlessly to mortgages and business lending. The lending hasn’t stopped – households still borrow – it has simply migrated to the non-bank sector, funded by an ABS market that has deepened dramatically in the last two years precisely to absorb these assets.

Against that backdrop, it’s worth considering the size of the opportunity: personal loan originations run at ~$12bn a year in Australia (Wisr’s share: ~3.0%), and secured vehicle originations at ~$46bn a year (Wisr’s share: a mere 0.4%). In other words, Wisr’s $1bn book sits inside a ~$58bn-a-year origination market being progressively vacated by its largest incumbents. The company does not need to win the market to make my numbers work; it needs to drift from a ~1% blended share towards ~1.5-2% to achieve strong, sustainable profitability.

Recent execution has been consistently strong; market yet to care

Zooming in on the last 18 months or so, and despite consistent execution, the market still hasn’t woken up to the story. Consider the sequence, all from the company’s filings:

• The loan book bottomed, then re-accelerated: $756.8mm (Dec-24) → $824.0mm (Jun-25) → $928.5mm (Dec-25) → $1,003.4mm at Mar-26, up 29% YoY and through the $1 billion milestone.
• Originations are compounding: +82% in H1FY26 to $311.0mm, then a record $186.1mm in Q3FY26 (+68% YoY) – with the fastest growth in secured vehicle loans (+111% YoY), the better-collateralized end of the product set. FY26 guidance has been upgraded twice, most recently to 50%+ origination growth.
• Credit is improving as the book grows: 90+ day arrears down 34bps YoY to 1.14%, net losses down 55bps to 1.44%, and the average Equifax score of the book up to 808. Whilst it is true that the broader market is yet to go through a consumer recession, it is quite comforting to see this level of book and origination growth – ‘there’s nothing scarier than a fast growing financial’ – with credit KPIs improving alongside.
• The cost base is essentially flat: opex grew just 7.9% in H1FY26 against 82% origination growth, with 83% of approvals now fully automated. Cost-to-income has fallen to 29.2%, guided below 29% for FY26, and the operating leverage from here should be straightforward.
• The balance sheet is no longer ‘cum raise’: a $10.6mm equity raise in November 2025 (at 3.1c – note, a ~50% premium to today’s price!) repaid $7.5mm of an expensive corporate facility, which was then refinanced with FC Capital at a materially lower margin ($27.5mm drawn on a $50mm limit, 3-year tenor).
• Q2FY26 was the Cash NPAT inflection point: the company turned profitable on its own preferred metric, guided to Cash NPAT profitability for H2FY26, and H1FY26 as a whole was within a whisker of breakeven (−$0.7mm, a $1.6mm improvement YoY).

So, to summarize, we have a growing, prime, increasingly-secured $1bn book, riding a structural handover from banks to non-banks; flat costs; improving losses; fixed funding; profitability arriving on schedule (even ahead of schedule). The stock’s response to all this has been, generously, nothing. Therein lies our opportunity today.

Thesis point 1: not asset-cheap – but extremely cheap on FY1/2 earnings

WZR is not cheap on book value. Equity was $26.7mm at Jun-25, call it ~$33mm today post-raise – and hence roughly the market cap. If you are looking for the hard-asset floor I usually demand, I’m afraid it is not here; this is a bet on the earnings trajectory, not the balance sheet. But that is precisely why the stock is still at 2c: it doesn’t quite screen ‘value’ (yet), whilst every growth investor stopped looking at sub-$50mm fintechs years ago. The stock is orphaned not because the story is bad but because nobody’s mandate captures it.

Like most lenders, the income statement is simply a function of a handful of inputs and hence if WZR simply maintains its current trajectory for another year or so it cannot help but scale into a very cheap equity on run-rate earnings power. In the below, I have simply extended the model forward – but adjusted inputs deliberately below current trends, for conservatism, that is, originations +25% in FY27 and +20% in FY28 (versus 50%+ guided for FY26 and ~60%+ actual YTD); book run-off at the current ~46% of average book; portfolio yield ~10.9% and NIM held at ~5.2% (Q3FY26: 5.23%, with front-book repricing offsetting funding-cost drift); net losses raised to 1.5% of average book in the out-years (vs 1.38% in H1FY26 and 1.44% in the seasonally-heavy Q3); opex growing 8.5% a year (vs 7.9% currently); and the corporate facility progressively repaid out of earnings:

It is worth sense-checking the cost-to-income (CTI) line because it is doing a lot of the ‘heavy lifting’ in driving operating leverage here as the loan book scales.  First, the mechanics: I am not assuming a single dollar of cost-cutting – opex grows every year in my model, from $28.4mm in FY25 to ~$36mm in FY28E; the ratio falls purely because revenue compounds at ~25% against costs compounding at 8.5%, which is exactly the relationship currently printing (82% origination growth against 7.9% opex growth in H1FY26). Second, on a per-unit basis, opex as a share of the average book falls from ~3.2% (FY26E) to ~2.3% (FY28E) – which makes sense, logically, for an almost-entirely automated origination platform where the company itself guides to “further upside as scale builds.’ Third, a direct comp, Plenti – perhaps the best listed analogue, with a $2bn+ book – already operates with a cost-to-income ratio in the low-to-mid 20s; my FY28E has Wisr merely arriving where its nearest peer already lives, at a comparable scale. And if I am wrong and CTI plateaus at, say, 26%? FY28E Cash NPAT drops to ~$12mm – and the stock is still on ~3x earnings. In other words given the inherent discount in the valuation you have room to see a little cost creep into opex and still be OK buying the stock here, in my view.

One final point worth mentioning concerns the tax shield here: Wisr carries ~$122mm of accumulated losses from the early years of fintech burn, meaning the Cash NPAT line converts to actual, tax-sheltered cash for many.

Against these numbers, the market cap is $37mm. That is ~3.6x FY27E and ~1.8x FY28E Cash NPAT – for a business growing its book 25%+ per annum with improving credit. WZR may be small and micro-caps may never completely re-rate but with scaled consumer lenders in the Australian small-cap universe trade at 6-10x Cash NPAT you have plenty of room to even marginally rerate, to the lower end of the listed comp group, and see multi-bagger territory. For example, even at just 6x P/E my FY28E numbers – that’s 1.5 years out – and you get a near 4 bagger…not too shabby. I would not underwrite that as my base case, but the key is at sub-2x two-year-out earnings, the debate is not about the multiple, it is about whether the earnings show up.

Thesis point 2: the consolidation math – or, why this shouldn’t stay independent

As usual however at Raper Capital, it is not simply about the valuation or just betting on the business to execute. The uncomfortable truth with WZR – as it is for many of the micro- and small-caps I am increasingly focused on these days – is that the enterprise is subscale for the public markets, and may well never properly rerate there. A $37mm market cap company at 2c a share cannot attract institutional coverage (there is next to none); cannot use its equity as currency; pays $2mm+ a year in listed-company costs that would fund a decent chunk of a marketing budget (and cuts a huge dent in run-rate cash profits, near-term); and – most bindingly – must retain equity against a book growing $250mm+ a year, meaning the temptation (or need) for further dilutive raises never quite goes away. The November raise, sensible as it was, was done at 3.1c for exactly this reason. This problem is especially acute for a lender where cost of equity is everything; it is no exaggeration to say that the punitive cost of equity here is a huge tax on the company’s future growth.

At the same time, though small, WZR brings many strengths as a potential dance partner: a national consumer lending platform with genuine automation (83% auto-approval, AI-driven verification and collections); a $1bn+ prime book growing 29%; an established ABS program; a broker and direct distribution engine; and $122mm of tax losses. The list of logical owners is long – the scaled non-bank consumer lenders (Plenti, with its ~$2bn+ book; MoneyMe at ~$1.3bn), the auto-finance specialists, the odd regional bank wanting a digital personal-lending capability, and private credit sponsors who have been hoovering up exactly these mid-sized lending platforms for two years. Any of them could strip $5mm+ of duplicate costs out of WZR the day the scheme closes, and most would pick up funding synergies on top.

The Solvar merger case study

To make this concrete, let’s run the merger that makes the most sense to me: Solvar Limited (ASX: SVR) – ~A$291mm market cap at $1.54 – the Melbourne-based auto lender formerly known as Money3. Consider the two companies side by side:

• Solvar is ex-growth; Wisr is high growth: SVR’s Australian book grew 1.7% in H1FY26, to $846.6mm; WZR’s grew 29%, to $1bn+. SVR is guiding to ~$36mm of normalised NPAT for FY26 and trades at ~9x earnings with a 10%+ fully-franked yield – the market prices it as a slowly-melting annuity. Having exited New Zealand and discontinued its buyback, it is a business generating capital faster than it can deploy it.
• Solvar has the funding; Wisr has the origination engine: SVR sits on ~$1.1bn of funding limits with over $500mm of undrawn headroom – warehouse capacity it cannot currently fill. WZR originates $690mm a year and growing, constrained mainly by capital.
• Complementary credit spectrums -> customer retention: Solvar’s franchise is, and always has been, sub-prime and non-conforming auto credit – borrowers the banks won’t touch, priced accordingly; Wisr sits a full band up the curve in prime/near-prime (book score 808). The two companies’ own H1 FY26 disclosures evidence this: Solvar earns a ~23% interest income yield and a 16.4% NII margin, and targets bad debts of 3.5-4.5% of the book; Wisr earns an ~11% portfolio yield on a 5.3% NIM, with net losses running at 1.4%. Plugging WZR in does two important things for SVR.    First, it diversifies the credit risk profile of the combined book – heading into whatever the economy serves up next, a lender split across prime, near-prime and sub-prime is a fundamentally more resilient (and more fundable, and more highly-rated) animal than a sub-prime monoline, and the ratings agencies and warehouse financiers will price it as such. Secondly, it fixes Solvar’s customer lifecycle leak. The natural journey of a successful sub-prime borrower is up: they make their repayments, their credit score heals, and at precisely the moment they become the most valuable, lowest-risk customer they will ever be – they refinance away to a cheaper, near-prime lender, because Solvar has nothing to graduate them into. If Wisr’s product were set up in-house, that graduation happens within the group – the customer relationship (and its lifetime value) is retained rather than donated to the market – whilst WZR’s near-prime declines can be referred down into Solvar’s credit box rather than turned away.

• Solvar has the funding and the franking; Wisr has the growth and the tax shelter: SVR is a full taxpayer distributing franking credits as fast as it can generate them; WZR brings $122mm of carried-forward losses – and because these two businesses are in the same line of business (consumer and auto lending in Australia), those losses should be fully usable against the combined group’s income under the business continuity tests. Given the complementarity of business models, these NOLs have huge value in any synergistic merger.

Hypothetical Merger math at 4c per WZR

Assume SVR acquires WZR all-scrip at 4.0c per share – a ~90% premium to the current price. That is ~A$70mm of consideration, or ~46mm new SVR shares at $1.54, taking SVR’s count from 188.9mm to ~235mm shares. Against that, the combined entity earns: SVR’s ~$35mm of ongoing normalised NPAT; plus WZR’s Cash NPAT (~$10mm on FY27E, ~$20mm on FY28E); plus ~$6mm of cost and funding synergies (see below for breakdown); plus the tax synergy – applying WZR’s $122mm of losses against the combined group’s taxable income shelters, at the 30% corporate rate, roughly $15mm per annum of tax that SVR would otherwise pay, for the first three-odd years of the combination (an NPV of ~$35mm+, i.e. half the purchase price back, before counting anything else).

Regarding the $6mm synergy number, it is composed of three pieces. Firstly, pure duplicate listed-entity costs (~$2mm) – ASX listing and registry fees, a second board, a second audit, co-sec, AGM, investor relations – drop out entirely. Secondly, I am assuming SVR strips just ~$2mm from overlapping head-office functions – ie CFO; a treasury/funding team running warehouse and ABS programs in the same asset class; a credit-analytics stack; and another finance and compliance team. Together that is ~$4mm of opex, or ~13% of WZR’s ~$30.5mm cost base – comfortably inside the 10-20% of target opex that acquirers routinely underwrite (and typically achieve) in in-market financials consolidation.

Thirdly, I estimate funding synergy could add a further $2mm in cost-outs. For example, my standalone WZR model still carries ~$2mm of cash interest on the FC Capital corporate facility in FY27E; SVR retires the $27.5mm drawn balance on day one out of its idle capacity, at effectively zero marginal cost. Mind you, I have not counted any warehouse-margin harmonization – where every 10bps saved across WZR’s ~$1bn funded book is another ~$1mm a year, let alone when combined with another ~$2bn book – or given any credit for SVR’s own recently-improved warehouse pricing reading across. I have also modeled zero revenue synergies (from the customer graduation flywheel) of any kind. In other words, $6mm is should be the low synergy case in a merger such as this, and nevertheless you still get the following accretion:

That is to say, Solvar could pay nearly double the current WZR price, entirely in shares, and still be ~50% EPS accretive on year-one numbers and ~75% accretive on year-two – whilst simultaneously diversifying its credit book up the quality curve, plugging its customer-lifecycle leak, filling half a billion dollars of idle funding capacity, and buying a growth engine that transforms its own terminal-value problem.

For WZR holders, 4c in the scrip of a dividend-paying, franked consolidator is a fine outcome from 2.1c; for SVR holders it is about the most accretive deployment of their over-capitalized balance sheet I can construct. I have no knowledge that either board is contemplating anything of the sort, to be crystal clear – this is my analysis, not a prediction. But when the industrial logic is this sound, and the register (see below) is this receptive, these things have a way of eventually finding their way onto an agenda. And Solvar is merely the cleanest example from a genuinely long list.

Thesis point 3: the register wants to get paid

The final leg of the stool is simply that the shareholder base has turned over significantly in the last couple of years, and what remains is (in my view) less patient capital. The anchor is now Acorn Capital at ~10% – a specialist microcap institution whose entire business model is buying underfollowed small companies before the rerate and monetizing the rerate when it comes; they are precisely the kind of holder who supports (indeed, agitates for) value-maximizing corporate activity, and precisely not the kind who blocks a well-priced scheme out of sentiment. Notably, Alceon – the opportunistic credit fund that sat at 11.5% through the turnaround – appears to have exited the register entirely, evidence both of the turnover and of the fact that the remaining base got set more recently (ie in and around the 3.1c placement last year). There is no controlling founder, strategic blocker, or anyone with an emotional attachment to independence. These are IRR-driven owners; every one of them would take a well-priced scrip merger or control transaction tomorrow, and none of them will fund empire-building. When the register and the industrial logic all point in the same direction, the only missing ingredient is time – and, perhaps, the odd noisy shareholder to move things along. Naturally, I will be looking to engage constructively with the company, and with like-minded holders, to maximize value in the context of these opportunities as the business continues to scale.

Risks

Whilst there are many risks to this investment (as you can imagine in a micro-cap financial trading at 2c), I think it is worth understanding that many of these risks are really artifacts of standalone subscale, and are therefore solved by the very strategic outcome this thesis anticipates. Credit is clearly the elephant in the room: this is a consumer lender, most of the book is personal loans, and I am underwriting 1.5% net losses into an uncertain economy. The current loss rates are the product of a deliberate up-tightening – but a proper consumer recession would likely be pretty ugly, and every 25bps of losses is roughly $3-4mm off my FY28E Cash NPAT. Note, though, what the last three years proved: this credit engine survived the fastest rate-hiking cycle in a generation with arrears falling – a genuinely encouraging stress test.

Funding compression is also, quite obviously, a substantial risk. NIM compressed 49bps YoY before stabilizing; the model needs warehouses renewed, ABS windows open, and no funding-market seizure. As long as the origination engine keeps printing such high growth, too, then Dilution risk is also substantial. Growth consumes equity via risk retention, and this management has shown it will raise when needed. Competition (MoneyMe, Plenti, etc) is also an ongoing concern given the space is increasingly competitive and it could compress the unit economics (though it hasn’t impeded growth or margins of late thus far). Finally, it’s important to always remember that this is a tiny company and hence liquidity is minimal (I got in via block trade, no idea really how to get out other than accretive merger, etc).

Once again, though, consider that many of these risks get ameliorated or solved with a scale merger. On a Solvar-sized (or larger) balance sheet, the equity-cushion/dilution problem disappears – the acquirer’s capital base and idle funding headroom absorb the growth that currently strains WZR’s; the funding risk shrinks as a diversified, better-rated book prices tighter in the warehouse and ABS markets; the illiquidity is solved outright, with holders exiting into the scrip of a real company with real volume; and even the credit risk is diluted across a broader, multi-band book. The residual risks in that world are the honest ones – the consumer cycle, and execution – which is all one can ever ask. Put differently: the bear case on WZR is substantially a bear case on standalone subscale, the mitigant to which is a strategic transaction that (surely) many shareholders will push for in the medium-term. That is why I frame this as somewhere between an investment and a speculation, and why I am comfortable owning it as such, sized as such.

Putting it all together

WZR at 2.1c, whilst slightly different to my usual fare, presents a pretty interesting multi-bagger speculation on continuing business improvement against a very low, forgotten, starting valuation. On deliberately-below-trend assumptions, you are paying ~3.6x next year’s and ~1.8x the year after’s Cash NPAT for a $1bn+ prime book compounding at 25%+ inside a ~$58bn-a-year origination market the banks are vacating, sheltered by $122mm of tax losses, with a register anchored by financial owners and a consolidation endgame – Solvar being only the most obvious – in which an acquirer can pay a ~90% premium and still print 50-75% EPS accretion. A rerate to the sector’s own (cheap) 6-9x range on FY28E numbers is, roughly, a 4-bagger. Given small size, execution, and liquidity risk, this can’t (in my view) be a large position, but I do have a modest position and will consider the case again post FY numbers this week.

Disclosure: long WZR.AX. Do your own due diligence. This is not investment advice and constitutes solely my own opinion, and should be read for entertainment purposes only.