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Here's Why You Should Retain WEX Stock in Your Portfolio

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WEX Inc.’s (WEX - Free Report) stock has gained 14.4% in the past month compared with 14.1% growth of the industry it belongs to.

The company has an expected long-term (three to five years) earnings per share growth rate of 27.9%. Its earnings for 2021 and 2022 are expected to grow 47.4% and 20.3% year over year, respectively.

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WEX Inc. price | WEX Inc. Quote                                                                                                     

Factors That Auger Well

WEX is benefiting from favorable customer spending patterns that continue to rebound from the pandemic blues, resulting in six times year-over-year growth in trade-related volumes in the third quarter of 2021. The company is gaining high volumes from its North American fleet customers, driven by continued rebound in mobility.

WEX has a large customer base and co-branded strategic relationships with some of the largest U.S. fleet management providers, as well as with numerous oil companies and convenience store operators. WEX’s customer retention rate remains healthy, driven by strength in its private-label portfolios, and value-added product and service offerings.

The recent acquisition of benefitexpress is expected to extend WEX’s health and employee benefits’ products and services across the employer clients. The 2020 acquisitions of eNett and Optal have strengthened the company’s position in the global travel marketplace.

Some Risks

WEX’s cash and cash equivalent balance of $1.2 billion at the end of the third-quarter 2021 was well below the long-term debt level of $2.8 billion. Nevertheless, the cash level can meet the short-term debt of $183 million.

Zacks Rank and Stocks to Consider

WEXcurrently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Zacks Business Services sector are Avis Budget (CAR - Free Report) ), Cross Country Healthcare, Inc. (CCRN - Free Report)  and CRA International, Inc. (CRAI - Free Report) .

Avis Budget has an expected earnings growth rate of around 453.5% for the current year. CAR has a trailing four-quarter earnings surprise of 76.9%, on average.

Avis Budget’s shares have surged 445.3% so far this year. It has a long-term earnings growth of 18.8%. CAR sports a Zacks #1 Rank.

Cross Country Healthcare has an expected earnings growth rate of around 500% for the current fiscal year. CCRN has a trailing four-quarter earnings surprise of 75%, on average.

Cross Country Healthcare’s shares have surged 214.6% so far this year. It has a long-term earnings growth of 21.5%. CCRN sport a Zacks #1 Rank.

CRA International has an expected earnings growth rate of around 61.2% for the current year. It has a trailing four-quarter earnings surprise of 51%, on average.

CRA International’s shares have surged 82.6% so far this year. It has a long-term earnings growth of 15.5%. CRAI carries a Zacks #2 (Buy) Rank.

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