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Here's Why You Should Retain WEX Stock in Your Portfolio
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WEX Inc. (WEX - Free Report) has had an impressive run over the past three months. The stock has gained 16.4% compared with the 6.2% growth of the industry it belongs to and the 2.6% uptick of the Zacks S&P 500 composite.
WEX has an expected long-term (three to five years) EPS growth rate of 12.2%. The company’s earnings for 2024 and 2025 are expected to grow 9.2% and 12.9%, respectively.
WEX is a leader in the fleet payments industry, providing payment solutions for fuel management, corporate travel and healthcare. Its dominance in this niche market gives it a competitive advantage, benefiting from long-term customer relationships and the recurring nature of its services. Fleet operators rely on WEX's solutions for better fuel efficiency and cost management.
WEX has effectively diversified its operations across three segments: Mobility, Corporate Paymentsand Benefits. This diversification provides the company with multiple revenue streams and reduces its reliance on any one industry. As a result, WEX is better positioned to weather economic volatility in specific sectors, such as travel or healthcare, which adds to its overall resilience.
The company has been a leader in leveraging technology to create innovative payment and data analytics solutions. WEX’s focus on enhancing user experience through mobile apps, real-time data tracking and digital payment solutions gives it an edge over competitors. This innovation in payment solutions not only improves customer loyalty but also helps attract new clients, especially in a technology-driven market.
Some Risks
The payment solutions industry is competitive, with many players offering similar services. WEX faces strong competition from both established companies and fintech startups, which could exert pressure on pricing and margins. As these competitors innovate, WEX will need to continually invest in new technologies to maintain its edge.
WEX does not pay out cash dividends. So, the only way to achieve a return on investment on the company’s stock is share price appreciation, which is not guaranteed. Investors seeking cash dividends may tend to avoid buying WEX shares.
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Here's Why You Should Retain WEX Stock in Your Portfolio
WEX Inc. (WEX - Free Report) has had an impressive run over the past three months. The stock has gained 16.4% compared with the 6.2% growth of the industry it belongs to and the 2.6% uptick of the Zacks S&P 500 composite.
WEX has an expected long-term (three to five years) EPS growth rate of 12.2%. The company’s earnings for 2024 and 2025 are expected to grow 9.2% and 12.9%, respectively.
WEX Inc. Price
WEX Inc. price | WEX Inc. Quote
Factors That Bode Well
WEX is a leader in the fleet payments industry, providing payment solutions for fuel management, corporate travel and healthcare. Its dominance in this niche market gives it a competitive advantage, benefiting from long-term customer relationships and the recurring nature of its services. Fleet operators rely on WEX's solutions for better fuel efficiency and cost management.
WEX has effectively diversified its operations across three segments: Mobility, Corporate Paymentsand Benefits. This diversification provides the company with multiple revenue streams and reduces its reliance on any one industry. As a result, WEX is better positioned to weather economic volatility in specific sectors, such as travel or healthcare, which adds to its overall resilience.
The company has been a leader in leveraging technology to create innovative payment and data analytics solutions. WEX’s focus on enhancing user experience through mobile apps, real-time data tracking and digital payment solutions gives it an edge over competitors. This innovation in payment solutions not only improves customer loyalty but also helps attract new clients, especially in a technology-driven market.
Some Risks
The payment solutions industry is competitive, with many players offering similar services. WEX faces strong competition from both established companies and fintech startups, which could exert pressure on pricing and margins. As these competitors innovate, WEX will need to continually invest in new technologies to maintain its edge.
WEX does not pay out cash dividends. So, the only way to achieve a return on investment on the company’s stock is share price appreciation, which is not guaranteed. Investors seeking cash dividends may tend to avoid buying WEX shares.
Zacks Rank and Stocks to Consider
WEX currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader Zacks Business Services sector are DocuSign (DOCU - Free Report) and Parsons (PSN - Free Report) , each carrying a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
DocuSign has a long-term earnings growth expectation of 9.3%. DOCU delivered a trailing four-quarter earnings surprise of 18.3%, on average.
Parsons has a long-term earnings growth expectation of 16.1%. PSN delivered a trailing four-quarter earnings surprise of 16.2%, on average.