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Why You Should Retain Corpay Stock in Your Portfolio Now

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Corpay, Inc. (CPAY - Free Report) has had an impressive run over the past six months. Shares have gained 10% against the 1.6% decline of the industry it belongs to and the 11.3% rise of the Zacks S&P 500 composite.

The company has an expected long-term (three to five years) earnings per share growth rate of 14.1%. Its earnings are expected to register growth of 12% in 2024 and 15.5% in 2025.

Factors That Bode Well for CPAY

Corpay’s top line continues to grow organically, driven by increased volume and revenues per transaction in its payment programs. The company continues to witness solid organic revenue growth, driven by sales, improving retention and business initiatives. Notably, organic revenue growth was 10%, 13%, 12%, 11%, and 10%, respectively, in 2023, 2022, 2021, 2020 and 2019.

CPAY has been consistently pursuing acquisitions and investments, both domestically in the United States and globally, to increase its customer base, workforce, and operational capabilities and expand its range of services across various industries. The September 2023 acquisition of PayByPhone expanded the company’s vehicle payment solutions for B2B fleet customers in North America and Europe. In 2023, it also acquired Global Reach Group, Mina Digital Limited and Business Gateway AG. These acquisitions marked a significant expansion of CPAY’s product portfolio and geographic presence.

CPAY has a consistent track record of share repurchase. In 2023, 2022, 2021 and 2020, the company repurchased shares worth $686.9 million, $1.41 billion, $1.36 billion and $849.9 million, respectively. Such moves indicate the company’s commitment to create value for shareholders and underline its confidence in its business.

A Risk for Corpay

Corpay’s current ratio (a measure of liquidity) at the end of second-quarter 2024 was 1.02, lower than the prior quarter’s 1.07 and the year-ago quarter’s 1.08. A decline in the current ratio does not bode well.

Zacks Rank and Stocks to Consider

CPAY currently carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks from the broader Zacks Business Services sector are Genpact (G - Free Report) and Jamf (JAMF - Free Report) .

Genpact carries a Zacks Rank of 2 (Buy) at present. It has a long-term earnings growth expectation of 8.4%.G delivered a trailing four-quarter earnings surprise of 6.9%, on average. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Jamf currently carries a Zacks Rank of 2. The company has a long-term earnings growth expectation of 57%. JAMF delivered a trailing four-quarter earnings surprise of 15.7%, on average.


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Genpact Limited (G) - free report >>

Jamf Holding Corp. (JAMF) - free report >>

Corpay, Inc. (CPAY) - free report >>

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