Daily Stock Market Report (Fri 16th Oct 2026) - WISE, ENT, RNK, SSIT

Good morning! There’s been some news leaking out from Anthropic, maker of the AI assistant Claude, over the last day or two.

Both the BBC and Bloomberg report that the company has told investors that its Q3 revenues were $16.8 billion.

This would represent quarter-on-quarter growth of 45%, down from quarter-on-quarter growth of 140% in the prior quarter.

While that is still an extraordinary growth rate, it remains to be seen what valuation the IPO process will support. It was previously thought that the company was aiming for a market cap of $1.8 to $2 trillion.

If we annualise the Q3 revenue figure, we get annualised sales of less than $70 billion and a price to sales multiple of 27x-30x at the valuation range mentioned above. This is going to be a very interesting IPO! 

Overnight market movements:

• The FTSE is flat at 10,835

• S&P 500 is up 0.2% at 7,760

• Brent crude (December) is down 0.8% at $105.05/bbl

• Gold is up 0.1% at $4,175oz

• Bitcoin is up 0.1% at $82,075

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The Agenda is complete. I intend to look at Wise and then may take the opportunity to cover one or two interesting stories I may have missed this week! Cheers.

Update: all done for now, have a great weekend!

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Companies Reporting

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Graham's Section

Wise (LON:WISE)

Down 2% at 881.8p (£9.04bn) - Q2 FY27 Trading Statement - Graham - GREEN =

Familiar themes at this currency specialist: double-digit growth across all key measures, combined with a reduction in the "take rate".

The ongoing reduction in take rate is explained like this: "we continued to proactively invest part of our operating leverage to further strengthen our competitive advantage of lower prices for customers ".

Let's do a quick comparison against the Q1 trading update:

We can see modest reductions in the year-on-year growth rates between the two tables: revenue growth falls from 25% to 21%, and customer growth falls from 21% to 20%.

Turning back to today's update, and the outlook statement:

Wise now expects FY27 net revenue growth to be in the upper half (17.5% - 20%) of our 15-20% medium-term target range on a constant currency basis

Wise continues to expect FY27 income before tax ('IBT') margin around the top of our 20-25% range. For H1FY27, we expect the IBT margin to be c.23%, including one-off expenses equivalent to c.2ppts. This includes c.$15 million relating to the dual listing of Wise.

This strikes me as an impressive profit margin, whether or not you include the one-off expenses.

CEO comment:

"More than 12 million customers chose Wise this quarter to move over $70 billion around the world, paying 49bps on average, with 78% of transfers completed instantly. Customers are also using Wise for more of their everyday financial needs - spending $14 billion on Wise cards and increasing holdings to $44 billion.

Graham's view

We last mentioned this one in July, on the news that Wise had been denied in its US application for a national trust bank charter.

That's not a full banking licence, but it would have strengthened Wise's position in the United States - getting more control over the financial infrastructure it uses.

As things stand, Wise in the US is licensed only as a money transmitter, and has to rely on fully-licensed banks in order to operate. It will make another application to upgrade its status in US at some point.

I stayed positive on this stock in July, when that disappointing news was released (circled in red):

Today, there are again a few reasons for possible caution.

Growth rates have receded a little, and the company continues to voluntarily sacrifice margin on currency exchange.

But I am staying positive once again today.

The reason is simple: I continue to view Wise as offering decent value in the context of a high-quality, fast-growth international fintech brand.

If the earnings multiple was 30x or higher, I'd have to stop and think a little longer about this. But at 18x, for an exceptional company, I don't need to demand that every trading update is perfect. I think Wise is on track to be a much bigger business in 3-5 years than it is today, so I'm staying positive.

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Entain (LON:ENT)

(Backlog section)

Down 1% yesterday at 439.1p (£2.8 billion) - Q3 Trading Update - Graham - AMBER =

The valuation here has collapsed over the past year. The market cap was £6 billion in August 2025, which is the last time we covered it.

Rachel Reeves brought the hammer down on the gambling industry in November 2025. Bad news for Entain's UK-based brands, especially Ladbrokes and Carol. See here for a complete list of their portfolio.

Roland and I have been neutral in this one, even prior to the tax increases. Key reasons include the level of debt involved, along with its messy, heavily adjusted accounts.

Here are the highlights from yesterday's trading update:

• Q3 net gaming revevenue +2%

• Q3 online net gaming revenue +3% which would have been higher if not for "particularly customer-friendly sports results".

Outlook: FY26 guidance reiterated: expect Online NGR growth of 4-6%, on a constant currency basis, with Underlying EBITDA (exc. Parent fees) at the lower end of £910m to £960m range.

CEO comment:

I am pleased with our Q3 performance which reflects the strength of our execution and reinforces the resilience of our globally scaled business as well as its ability to consistently deliver high-quality growth.

Graham's view

As a long-suffering shareholder in Evoke (LON:EVOK), I'm not impressed by a highly-leveraged gambling company that emphasises its adjusted EBITDA.

In H1, Entain reported an underlying EBITDA of £479m, but it was still loss-making on a statutory, after-tax basis.

It has been loss-making on a statutory basis for a while now:

Underlining the risky nature of the sector, the company's Brazil revenues have collapsed by 36% - there was "an increasingly challenging market prior to the immediate Online gambling ban announced on 25th September 2026".

The P/E multiple is only 7x but that doesn't take into account the leverage involved (£3.2bn or £3.6bn as of June 2026, depending on how you count it). The leverage multiple was last reported at 3.1x - my rule of thumb in most sectors is that I'm uncomfortable with anything over 3x.

Forecasts also tend to allow for the company's adjustments, which are a big deal at Entain. In H1, for example, there were nearly £200m of "separately disclosed items", including £96m of "legal and onerous contract provisions" and £57m of "other" costs (!).

It might even be possible to justify AMBER/RED here, but I'll just leave us on neutral.

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Rank (LON:RNK)

(Backlog section)

Unchanged yesterday at 74p (£347m) - Q1 2026/2027 trading update - Graham - AMBER/GREEN =

Solid stuff from this casino and bingo hall operator:

It's nice to see that growth is shared between digital and land-based venues - this is not a case where the land-based venues are in secular decline, as we often see with bookies.

The digital business has survived the higher taxes:

The UK business continues to demonstrate resilient customer metrics despite the higher tax regime introduced in April 2026 and reduced above-the-line marketing spend.

"Above-the-line" is a nice bit of marketing lingo - it refers to mass-market advertising, rather than targeted efforts to convert individuals. In response to higher taxes, many UK gambling companies have responded by cutting their advertising budgets. In this context, UK digital growth of 6% seems very good to me.

Grosvenor casinos: customer visits are up 1%, with a 5% increase in spend per visit. Maybe this could have been a little better, considering that casinos have been allowed to install more machines since last year. Gaming machine revenue was up 14%. But at the same time, 3 casinos were closed (Swansea, Reading, Sunderland).

Mecca (bingo): flat revenue, as the hot weather reduced visitor numbers.

Outlook:

The Group has made a strong start to the new financial year and, based on the current industry tax regime in the UK, is confident of delivering Group LFL operating profit in line with market expectations for the current year.

CEO comment, highlighting further tax risk:

“Speculation regarding the upcoming Budget continues to weigh heavily on investor sentiment, but our message has been clear: any increase to Machine Games Duty will increase costs, reduce venue viability, lead to venue closures and job losses, reduce tax receipts and halt investment. HM Treasury recognised these economic arguments last year and, with the right conditions, we believe our casinos and bingo clubs can play an important role in the Government’s growth agenda.”

Graham's view

I don't want to wade too far into politics here, but I think casinos will have every right to feel let down if the government doubles taxes on the very machines that they have only just allowed casinos to install in their properties. It actually feels like a bait-and-switch!

I toned down my enthusiasm for Rank in August, when I highlighted the risk of higher MGD.

The stock continues to offer decent value based on current profitability (and it has net cash on the balance sheet):

Given the fragility of land-based earnings, and the tax risk, I'm going to remain a little cautious on this one. AMBER/GREEN it is. Hopefully we see a friendly budget, in which case I'd expect the share price to recover to c. 100p.

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Seraphim Space Investment Trust (LON:SSIT)

(Backlog section)

Down 2% yesterday at 194.4p (£461m) - Full Year Results - Graham - AMBER =

Seraphim Space Investment Trust plc (LSE: SSIT), the world's first listed SpaceTech investment company, announces its results for the financial year ended 30 June 2026.

This popular trust now has two share classes: SSIT and SSIC (C-shares).

The C-shares were used as a fundraising mechanism so that Seraphim could raise capital without suffering cash drag that would affect the performance of SSIT. Over time, SSIC shares will gradually be converted into SSIT shares.

That was a very clever idea in principle, but it does create a layer of complexity when studying the company's results.

Here are the key numbers for SSIT, the ordinary shares:

• Net asset value £570m

• Net asset value per share 240.49p (so SSIT shares are trading at a discount to this)

Thanks to the use of C-shares for fundraising purposes, there has been no change in the SSIT share count year-on-year.

As a result, both SSIT's NAV and its NAV per share have increased at exactly the same rate over the past year. Their growth rate was 102.9% - a remarkable result.

The main holding continues to be the Finnish company ICEYE (53.9% of total NAV, compared to 37.4% a year ago).

What it does: "ICEYE owns the world's largest and most advanced SAR (synthetic aperture radar) satellite constellation". Here's its website.

Beyond that concentrated holding, Seraphim is reasonably diversified. The next three largest holdings account for 6.4%, 5.8% and 5.3% of NAV.

But ICEYE itself deserves a few more words. Check this out:

The net cost of Seraphim's investment in ICEYE is just £39.6m, and this holding is now valued at £379.7m, having seen its fair value increase by £274.6m over the past year! On its way to becoming a ten-bagger.

ICEYE enjoys a private market valuation of over €10 billion. Here's some background on its business performance last year:

ICEYE (53.9% of NAV) continued its transformation into a global defence and intelligence leader, reporting unaudited 2025 revenue of more than €250m and EBITDA exceeding €100m. Its joint venture with Rheinmetall was awarded a €1.7bn contract to provide Germany with space-based reconnaissance capabilities. The company also signed a $168m contract with the Finnish Defence Forces and an agreement with IHI Corporation in Japan for the delivery of an initial four satellites with options for up to 20 more.

The 2025 revenue number mentioned above implies an eye-watering price-to-sales multiple of 40x. This should fall to 20x in the current year, based on what we've previously been told about revenue doubling, and then hopefully fall further in 2027. It has an order backlog of €1.5 billion, and recently announced a partnership with Nokia to develop low earth orbit satellite communications systems.

Outlook: Seraphim expect more fundraisings at higher valuations. This would further boost NAV.

While ongoing volatility in listed space stocks remains a cautionary indicator, we remain optimistic about the portfolio’s overall trajectory...

We also anticipate continued momentum in portfolio fundraising, including further large-scale rounds at higher valuations. This should provide additional validation of the commercial progress and growing maturity of the portfolio’s leading companies.

Graham's view

I was neutral on Seraphim in June, when we learned that ICEYE had just achieved a valuation of over €10 billion.

My cursory review of these latest results does not motivate me to change my mind.

If you're convinced by the opportunity in the space sector, then clearly this trust is going to carry some appeal.

If instead you believe that space is in a bubble (financially), then you'll probably want to stay away.

Personally, I do fall into the latter camp. Price-to-sales multiples of 20x tend to scare me away, even for the highest-quality businesses, and I don't know if ICEYE is a high-quality business. As for the rest of the portfolio, I assume that the valuations are similarly frothy. The poster child for the sector - Space Exploration Technologies (NSQ:SPCX) - has a ValueRank of 5.

Value investors always tend to miss out on opportunities like this. But there are plenty of ways to make money in the markets - and if this one has been a winner for you, I'm glad!