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Analyst Blog

On Apr 10, 2013, shares of FleetCor Technologies, Inc. (FLT - Snapshot Report) hit a 52-week high of $78.87.

FleetCor remains focused to grow inorganically. On Mar 26, 2013, the company announced the acquisition of Fleet Card – a multi-line fuel card – from the custom fleet leasing business of GE Capital Australia. This transaction will mark FleetCor’s foray into the Australian market. Also, the transaction is expected to be accretive by about 3 cents per share to adjusted earnings.

Earlier, on Mar 14, FleetCor entered into an agreement to buy the Telenav enterprise business unit from Telenav, Inc. (TNAV) for $10 million.

FleetCor expects to earn revenues of $190–$194 million in 2013. Moreover, earnings per share are guided in the range of $3.61 to $3.69 per share.

With respect to earnings trend, the company delivered positive earnings surprise in 3 out of 4 quarters in 2012 with an average beat of 10%. The Zacks Consensus Estimate of for the first quarter of 2013 is currently pegged at 77 cents, reflecting a 40% year-over-year increase.

The valuation of FleetCor’s shares looks stretched. The shares are trading at a larger premium on both price-to-book and forward price-to-earnings basis, compared to the 25% premium on return on equity. Nevertheless, the 1-year return from the stock is 103.2%, much above S&P’s return of 16.7%.  

FleetCor carries a Zacks Rank #3 (Hold). Other companies worth considering in the financial sector are Euronet Worldwide Inc. (EEFT - Snapshot Report) and SS&C Technologies Holdings, Inc. (SSNC - Snapshot Report). Both these companies carry a Zacks Rank #1 (Strong Buy).

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