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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 11.4% in the year-to-date period against the 9.5% decline of the industry it belongs to.
Image Source: Zacks Investment Research
WEX has an expected long-term (three to five years) earnings per share growth rate of 17.8%. Its earnings for 2022 and 2023 are expected to grow 38.7% and 8.3%, respectively, from the corresponding year-ago reported figures.
Factors That Augur Well
WEX’s top line continues to grow, driven by its extensive network of fuel and service providers, transaction volume growth, product excellence, marketing capabilities, sales force productivity and other strategic revenue-generation efforts. Total revenues for first-quarter 2022 increased 26% year over year to $517.5 million.
Product and service quality, and a deep understanding of customers’ operational needs enabled WEX to achieve revenue stability with the help of long-standing strategic relationships, multi-year contracts and high contract renewal rates.
Acquisitions acted as a key catalyst for the company. WEX continues to actively acquire and invest in businesses, both in the United States and internationally, to expand its product and service offerings, contributing to revenue growth and enhancing scalability. The acquisition of benefitexpress is expected to extend WEX’s health and employee benefits’ products and services to employer clients.
Some Risks
WEX has more long-term debt outstanding than cash. Cash and cash equivalents balance of $2.23 billion at the end of the first quarter was well below its long-term debt of $2.77 billion.
Zacks Rank and Stocks to Consider
WEX carries a Zacks Rank #3 (Hold) at present. Some better-ranked stocks in the broader Business Services sector that investors may consider are Cross Country Healthcare (CCRN - Free Report) and FactSet Research Systems Inc. (FDS - Free Report) .
Cross Country Healthcare delivered a trailing four-quarter earnings surprise of 29.2%, on average.
FactSet currently carries a Zacks Rank #2 (Buy). FDS has a long-term earnings growth expectation of 10%.
FDS pulled off a trailing four-quarter earnings surprise (three beat & one miss) of 6.1%, on average. FactSet continues to benefit from high client retention, solid revenue growth and a competitive pricing strategy.
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Here's Why You Should Retain WEX Stock in Your Portfolio
WEX Inc.’s (WEX - Free Report) stock has gained 11.4% in the year-to-date period against the 9.5% decline of the industry it belongs to.
Image Source: Zacks Investment Research
WEX has an expected long-term (three to five years) earnings per share growth rate of 17.8%. Its earnings for 2022 and 2023 are expected to grow 38.7% and 8.3%, respectively, from the corresponding year-ago reported figures.
Factors That Augur Well
WEX’s top line continues to grow, driven by its extensive network of fuel and service providers, transaction volume growth, product excellence, marketing capabilities, sales force productivity and other strategic revenue-generation efforts. Total revenues for first-quarter 2022 increased 26% year over year to $517.5 million.
Product and service quality, and a deep understanding of customers’ operational needs enabled WEX to achieve revenue stability with the help of long-standing strategic relationships, multi-year contracts and high contract renewal rates.
Acquisitions acted as a key catalyst for the company. WEX continues to actively acquire and invest in businesses, both in the United States and internationally, to expand its product and service offerings, contributing to revenue growth and enhancing scalability. The acquisition of benefitexpress is expected to extend WEX’s health and employee benefits’ products and services to employer clients.
Some Risks
WEX has more long-term debt outstanding than cash. Cash and cash equivalents balance of $2.23 billion at the end of the first quarter was well below its long-term debt of $2.77 billion.
Zacks Rank and Stocks to Consider
WEX carries a Zacks Rank #3 (Hold) at present. Some better-ranked stocks in the broader Business Services sector that investors may consider are Cross Country Healthcare (CCRN - Free Report) and FactSet Research Systems Inc. (FDS - Free Report) .
Cross Country Healthcare currently sports a Zacks Rank #1 (Strong Buy). CCRN has a long-term earnings growth expectation of 6.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cross Country Healthcare delivered a trailing four-quarter earnings surprise of 29.2%, on average.
FactSet currently carries a Zacks Rank #2 (Buy). FDS has a long-term earnings growth expectation of 10%.
FDS pulled off a trailing four-quarter earnings surprise (three beat & one miss) of 6.1%, on average. FactSet continues to benefit from high client retention, solid revenue growth and a competitive pricing strategy.