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FleetCor Technologies: A Strong Buy

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On Sep 12, Zacks Investment Research upgraded FleetCor Technologies, Inc. (FLT - Free Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

FleetCor Technologies has witnessed rising earnings estimates on the back of solid second quarter 2013 results and an enhanced guidance for fiscal 2013. Moreover, this financial service provider delivered positive earnings surprise in the last 4 quarters with an average beat of 9.8%. The long-term expected earnings growth rate for this stock is 16.1%.   

FleetCor Technologies reported second quarter results on Aug 1. Non-GAAP earnings per share came in at 97 cents, surpassing the Zacks Consensus Estimate of 88 cents by 10.2% and year-ago earnings of 70 cents by 38.6%.

Earnings were primarily aided by solid top-line growth of 28.5%. The quarter also marked record revenues and profits.

FleetCor Technologies also signed two new agreements – with Husky Oil of Canada and Visa Europe. The company also extended its association with Shell in the U.S.

Based on its progress, the company raised its earnings projection for fiscal 2013 to $322–$327 million or $3.82–$3.87 per share from $310–$320 million or $3.70–$3.80 per share. Revenue guidance was raised to $825–$835 million from $810–$820 million.

The Zacks Consensus Estimate for 2013 increased 3.6% to $3.72 per share as all four estimates were revised higher over the last 60 days. For 2014, all estimates were revised higher over the same time frame, lifting the Zacks Consensus Estimate by nearly 5% to $4.28 per share.

Recently, FleetCor Technologies announced that it acquired Brazil’s VB Servicos, Comercio e Administracao LTDA (“VB”) and inked a deal to acquire Brazil’s DB Trans S.A. (“DB”). Purchase considerations totaled $300 million. The acquisitions are aimed at capitalizing on growth opportunities in the Brazilian market.

Other Stocks to Consider

Financial service providers CIT Group Inc. (CIT - Free Report) , SS&C Technologies Holdings, Inc. (SSNC - Free Report) , and Financial Engines, Inc. (FNGN - Free Report) with Zacks Rank #2 (Buy) are also performing well and are worth considering.

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