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WEX Inc. (WEX) Upgraded to Strong Buy on Q2, Recent Deals

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On Aug 26, 2016, Zacks Investment Research upgraded WEX  Inc. (WEX - Free Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

WEX Inc has been witnessing rising earnings estimates on the back of strong performances in the last few quarters and recent deals. This financial transaction service provider delivered positive earnings surprises in the last three quarters consecutively, with an average beat of 8.6%. The long-term expected earnings growth rate for this stock is 14.8%.

Earlier this month, WEX Australia extended its master agreement with Helloworld Group. Per the agreement, the company will provide a virtual payments solution.

In its effort to expand its footprint in the insurance payment space in both Europe and the U.S., WEX Inc. announced last month that it has inked a new virtual payments agreement with global insurance technology provider Aquarium Software. This marks the first insurance for the company’s European entity.

WEX INC Price and Consensus

WEX INC Price and Consensus | WEX INC Quote

With respect to earnings performance, the company delivered a 5.26% positive surprise in the second quarter of 2016. The bottom line also exceeded the company’s guidance. The outperformance came on the back of organic growth opportunities as well as the successful execution of strategic priorities. Even the top line surpassed the Zacks Consensus Estimate.

WEX Inc. estimates adjusted net income of $1.07 to $1.14 per share on revenues of $272 million to $282 million. For 2016, adjusted net income is projected between $4.17 and $4.37 per share on revenues of $975 million and $1 billion.

The Zacks Consensus Estimate for 2016 increased 0.5% to $3.97 per share as three out of eight estimates were revised higher over the last 60 days. We see a similar trend for 2017 as well with again three out of eight estimates going up over the same time frame, lifting the Zacks Consensus Estimate by 5.9% to $4.88.

Other Stocks to Consider

Investors interested in the finance sector can also take a look at Argo Group International Holdings, Ltd. , Meta Financial Group, Inc. (CASH - Free Report) and Allied World Assurance Company Holdings, AG (AWH - Free Report) . Each one of these shares the Zacks Rank with WEX Inc.

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