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Here's Why You Should Retain WEX Stock in Your Portfolio Now
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WEX Inc. (WEX - Free Report) has an impressive Growth Score of A. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of quality and sustainability of growth. For 2021, earnings and revenues are expected to grow at a rate of 42.7% and 16.8%, respectively, on a year-over-year basis. The company has an expected long-term (three to five years) earnings per share (EPS) growth rate of 27.2%.
The stock has rallied 24.3% in the past year against a 7.9% loss of the industry it belongs to.
Image Source: Zacks Investment Research
Factors That Auger Well
Acquisitions have acted as a key growth catalyst for the company. WEX has been actively acquiring and investing in businesses, both in the United States as well as internationally, to expand its product and service offerings. These factors have been contributing to revenue growth and enhancing scalability. The recent acquisition of benefitexpress is expected to extend WEX’s health and employee benefits’ products and services across the employer clients. In 2020, WEX acquired eNett and Optal, which have strengthened the company’s position in the global travel marketplace.
WEX’s top line continues to grow organically driven by its extensive network of fuel and service providers, transaction volume growth, product excellence, marketing capabilities, sales force productivity and other strategic revenue generation efforts. Robust demand for its payment processing, account servicing and transaction processing services along with operational efficiency has helped WEX achieve solid revenue and earnings growth.
Primary Concern
WEX’s cash and cash equivalent balance of $1 billion at the end of second-quarter 2021 was well below the long-term debt level of $2.9 billion. This underscores that the company doesn’t have enough cash to meet this debt burden. Nevertheless, the cash level can meet the short-term debt of $146 million.
Image: Shutterstock
Here's Why You Should Retain WEX Stock in Your Portfolio Now
WEX Inc. (WEX - Free Report) has an impressive Growth Score of A. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of quality and sustainability of growth. For 2021, earnings and revenues are expected to grow at a rate of 42.7% and 16.8%, respectively, on a year-over-year basis. The company has an expected long-term (three to five years) earnings per share (EPS) growth rate of 27.2%.
The stock has rallied 24.3% in the past year against a 7.9% loss of the industry it belongs to.
Factors That Auger Well
Acquisitions have acted as a key growth catalyst for the company. WEX has been actively acquiring and investing in businesses, both in the United States as well as internationally, to expand its product and service offerings. These factors have been contributing to revenue growth and enhancing scalability. The recent acquisition of benefitexpress is expected to extend WEX’s health and employee benefits’ products and services across the employer clients. In 2020, WEX acquired eNett and Optal, which have strengthened the company’s position in the global travel marketplace.
WEX’s top line continues to grow organically driven by its extensive network of fuel and service providers, transaction volume growth, product excellence, marketing capabilities, sales force productivity and other strategic revenue generation efforts. Robust demand for its payment processing, account servicing and transaction processing services along with operational efficiency has helped WEX achieve solid revenue and earnings growth.
Primary Concern
WEX’s cash and cash equivalent balance of $1 billion at the end of second-quarter 2021 was well below the long-term debt level of $2.9 billion. This underscores that the company doesn’t have enough cash to meet this debt burden. Nevertheless, the cash level can meet the short-term debt of $146 million.
Zacks Rank & Stocks to Consider
WEX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks Business Services sector are ManpowerGroup Inc. (MAN - Free Report) , Equifax (EFX - Free Report) and Genpact Limited (G - Free Report) , each carrying a Zacks Rank #2 (Buy).
Long-term expected EPS growth rate for ManpowerGroup, Equifax and Genpact is pegged at 24.2%, 14.9% and 14.7%, respectively.