$xoom(XOOM)$ The traditional way in money transfer is being disrupted while the digital worlddevelops so quickly, people eager to use app in laptop and mobile for efficient daily life which gave birth to XOOM.

Introduction:
Xoom,a pure player in digital consumer to consumer money transfer industry, foundedin 2001 and went public in Feb.2013. It provided fast and cost-effective money transfer and bill payment service under reliable risk management and regular compliance. Customers can use XOOM, no physical location only through thewebsite and Phone App, to send money from US to 32 countries including China and pay bills cross-border from US to five countries and its customers base isimmigrants in US.

Market:
US is the top destination for immigrants with 40million representing 13% of USpopulation. $123billion cross-border remittance is sending from US while the global remittance volume is more than $549 billion every year. On Xoom’s map, 32 remittance-receiving countries including top 4 :India, China, Philippines, Mexico
Xoomsend $6.9 billion from US in 2014,5.6% US market shares. As we can see, Xoom isin the small position and at the first stage of its growth.

How to make money and Strengths:
Xoom makes money by charging the transaction fees and F/X spread if the transfer currency is not US dollars and the spread ranges from 1%-3%.its compelling strengths are the near instant transfer based on the Automated Clearing House (ACH) systemand its affordable fee which its largest competitor Western Union (WU) can’t catch up at all.

Key operating and financial metrics:
1.    Revenue:$159million in 2014,increased 30% for 2014 compared to the prior year, 53% for 2013 and 60% for 2012.
2.    GSV(GrossSending Volume): $6.9 billion in 2014,increased 24% for 2014 compared to theprior year,71% for 2013 and 90% for 2012.
3.    Activecustomers:1.28million in 2014,increased 21% for 2014 compared to the prioryear,36% for 2013 and 50% for 2012.

Strategy:
1.Penetrate Current Markets: Optimize marketing investment; Refine customer service; Enhance mobile capabilities; Establish new partners
2. Expandin New Markets: New recipient markets; New originating markets
3.Explore Adjacent Service: Leverage deep customer and recipient relationship;deliver new services to unlock new revenue streams

Concerns:
1. GrowthRate: As a growth company, revenue is the key metric and as we can see thegrowth slow down.
2.Risk management: A business email compromise fraud happened late Dec 2014 whichbring us to worry about its risk management although there is no evidence that the system were penetrated. Due to its instant transfer, Xoom always need topre-send the fund before receiving it in one or two days later. Although Xoomis confident on its risk management, it is still facing the challenge that theslower transfer from WU or other Bank to Bank is for security concern.
3. Competitors:There are a few of big players in this market and new comers including WU, MoneyGramand paypal etc. They offer the competitive transfer fee and lower exchange rateto capture the market although XOOM insisted they can’t stay for long term without gross margin.
4.Strategy: XOOM still focus on immigrants market in US and now it is one-way remittance. All these are for individuals customers instead of business.

Conclusion:
For short and middle time, seek for the buy in point or “sell to open puts on it” to get the stock at a premium price or gain cash the puts pay me.
For long time, keep eyes on its business plan and risk management. If any further exploration strategy under good risk management announced, hold and buy more.Otherwise, sell it.