WisdomTree backs AI ETFs

WisdomTree, Inc., continues to advance its position in asset management through strategic innovation and recently deepening its capabilities in AI-driven ETF design and portfolio management. Building on sustained operational momentum, the company demonstrates a strong trajectory powered by enhanced advisory expertise and differentiated product offerings.

WisdomTree, founded in 1985 and headquartered in New York, offers exchange-traded funds (ETFs), exchange-traded products (ETPs), model portfolios, and digital financial solutions, specializing in innovative asset management and financial technology services. The company operates in the US and Europe through a single segment.

WisdomTree invests in AlphaBeta

On November 3, 2025, WisdomTree announced a $2.5m minority investment in AlphaBeta ETF, an Israel-based fintech company, to strengthen its AI-driven ETF innovation. This boosts WisdomTree's capabilities in index design and portfolio management through cutting-edge AI research and technology. The collaboration intends to deliver hedge fund-like strategies in a transparent, liquid ETF format, reaffirming WisdomTree's leadership in ETF innovation.

Sustained growth

WisdomTree demonstrated decent performance over FY 21-24, achieving a revenue CAGR of 12.0%, reaching $428.0m in FY 24, driven by higher advisory fees and robust ETF performance across US and Europe. EBITDA registered a CAGR of 15.3%, reaching $138.0m. Consequently, margins improved by 264bp to 32.2%.

Over FY 21-24, FCF grew from $78.1m to $103.0m, supported by a rise in cash inflow from operations, from $75.3m to $113.0m. This led to an increase in cash and cash equivalent, from $141.0m to $181.0m. In addition, ROA increased from 5.8% to 8.7% and ROE rose from 12.4% to 14.2%.

Over Q3 25, WisdomTree delivered double-digit revenue growth, driven by increased average AUM and other revenue, on account of its European listed ETPs. In addition, operating margin expanded by 550bp to 36.3%.

In comparison, Victory Capital Holdings, Inc., a local peer, reported a lower revenue CAGR of 0.1% over FY 21-24, reaching $893.0m in FY 24. EBITDA rose at a CAGR of 2.5% to $459.0m, with margin expansion from 48.0% to 51.4%.

Optimistic analyst view

Over the past year, the company paid an annual dividend of $0.1, resulting in a dividend yield of 1.1%.

WisdomTree is currently trading at P/E of 16.0x, based on FY 25 estimated EPS of $0.7, which is lower than its 3-year historical average of 20.1x but higher than Victory Capital (12.3x). The company is currently trading at an EV/EBITDA multiple of 10.4x, based on FY 25 estimated EBITDA of $181.4m, which is lower than its 3-year historical average of 13.1x but higher than Victory Capital (7.4x).

WisdomTree is monitored by six analysts, with four having ‘Buy’ ratings and two having ‘Hold’ rating for an average target price of $15.0, implying 33.9% upside potential over the current price.

Analysts’ views are supported by an estimated revenue CAGR of 13.2%, reaching $620.0m over FY 24-27. EBITDA is estimated to rise at a CAGR of 18.3% to $238.5m with margin expansion of 479bp to 38.5% in FY 27. Analysts estimate a net profit CAGR of 32.0% to $153.5m. Likewise, for Victory Capital, the analysts estimate an EBITDA CAGR of 19.7% over FY 24-27 and a net profit CAGR of 34.7% over FY 24-26.

Overall, WisdomTree has demonstrated consistent operational excellence and innovative momentum, supported by investments in AI-driven strategies. Looking forward, the company is positioned for continued growth, underpinned by strategic partnerships. However, it may face risks of market volatility, competitive pressures, and issues concerning technological execution and data integrity.