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6 Reasons Why It is Worth Betting on WEX for Your Portfolio

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WEX Inc. (WEX - Free Report) has performed well in the year-to-date period and has shown the potential to sustain the momentum. If you haven’t taken advantage of its share price appreciation yet, it’s time you add the stock to your portfolio.

Let’s look at the factors that make the stock an attractive pick.

An Outperformer: Shares of WEX have rallied 12.6% in the year-to-date period against the 12.8% fall of the industry it belongs to.

Zacks Investment Research
Image Source: Zacks Investment Research

Solid Rank: WEX currently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 offer attractive investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.

Northward Estimate Revisions: One estimate for 2022 has moved north in the past 60 days versus no southward revision, indicative of analysts’ confidence in the stock. The Zacks Consensus Estimate for 2022 earnings has moved up 0.2% in the past 60 days.

Positive Earnings Surprise History: WEX has an impressive surprise history. Its earnings outpaced the Zacks Consensus Estimate in all the trailing four quarters, the average being 8.6%.

Strong Prospects: The Zacks Consensus Estimate for 2022 earnings is pegged at $12.70, suggesting growth of 39% from the year-ago reported figure. Moreover, earnings are expected to register 8.2% growth in 2023. WEX’s long-term expected earnings per share (EPS) growth rate is 17.8%.

Driving Factors: Acquisitions have acted as a key catalyst for WEX so far.  It has been actively acquiring and investing in businesses, both in the United States and internationally for a while, to expand its product and service offerings, thus contributing to revenue growth and enhancing scalability. The acquisition of benefitexpress in 2021 is expected to extend WEX’s health and employee benefits’ products and services across the employer clients. In 2020, WEX acquired eNett and Optal, both having strengthened its position in the global travel marketplace.

Robust demand for payment processing, account servicing, transaction processing services and operational efficiency helped WEX achieve solid revenues and earnings growth. WEX’s first-quarter 2022 revenues and adjusted EPS rose 26% and 61%, respectively, year over year.

Other Stocks to Consider

Other stocks worth considering in the broader Zacks Business Services sector include Avis Budget Group, Inc. (CAR - Free Report) , Genpact Limited (G - Free Report) and CRA International, Inc. (CRAI - Free Report) .

Avis Budget sports a Zacks Rank #1 at present. CAR has a long-term earnings growth expectation of 19.4%.  

Avis Budget delivered a trailing four-quarter earnings surprise of 102%, on average.  

Genpact sports a Zacks Rank of 1 at present. G has a long-term earnings growth expectation of 12.3%.

Genpact delivered a trailing four-quarter earnings surprise of 13.3%, on average.  

CRA International sports a Zacks Rank #1, currently. CRAI has a long-term earnings growth expectation of 14.3%.

CRAI delivered a trailing four-quarter earnings surprise of 35.8%, on average.
 

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