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Here's Why You Must Retain FLEETCOR (FLT) Stock for Now

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FLEETCOR Technologies, Inc. currently benefits from strategic acquisitions and strong organic revenues.

FLT earnings are anticipated to register growth of 18.6% and 12.7% in 2022 and 2023, respectively.

Factors That Augur Well

FLEETCOR’s top line continues to grow organically, driven by an increase in both volume and revenues per transaction in its certainayment programs. FLT continues to witness solid organic revenue growth, driven by strength across its product categories, such as fuel, corporate payments, tolls and lodging. Organic revenue growth was 12%, 11%, 10% and 9%, respectively, in 2021, 2019, 2018 and 2017. For the first quarter of 2022, revenues of $789.2 million increased 30% year over year on a reported basis and 15% on a pro-forma and macro-adjusted basis.

Acquisitions are contributing significantly to FLEETCOR’s top line. FLT is continuously acquiring and investing in companies, both in the United States and internationally, to expand its customer base, headcount and operations as well as diversify its service offerings across industries.

On Jun 9, 2022, management announced that FLEETCOR agreed to acquire UK-based cross-border payments provider Global Reach Group. The deal is expected to be completed in the fourth quarter of 2022. The acquisition will strengthen FLT’s global position as a non-bank cross-border provider by increasing its scale of payments. On Mar 3, 2022, FLT announced that it completed the acquisition of Levarti, an airline software platform company. The acquisition is expected to strengthen FLT’s airline-lodging business.

Some Risks

FLEETCOR Technologies’ current ratio (a measure of liquidity) at the end of first-quarter 2022 was pegged at 1.01, lower than the current ratio of 1.04 reported at the end of the previous quarter. Decreasing current ratio is not desirable as it indicates that the company may have problems meeting its short-term debt obligations.

Shares of FLT have dropped 14.6% in the past year compared with the 33.3% fall of the industry it belongs to.

Zacks Investment Research
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Zacks Rank and Stocks to Consider

FLEETCOR currently 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 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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