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Here's Why You Should Hold WEX Stock in Your Portfolio for Now
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WEX Inc.’s (WEX - Free Report) stock has gained 19.4% year to date against a 5.9% decline in the industry it belongs to.
The company has an expected long-term (three to five years) earnings per share growth rate of 18.9%. Its 2022 and 2023 earnings are expected to grow 44.9% and 5.4% year over year, respectively.
WEX’s strategic revenue generation efforts include utilizing its extensive network of fuel and service providers, transaction volume growth, product excellence, marketing capabilities, and sales force productivity. Product and service quality and a deep understanding of customers’ operational needs have enabled WEX to achieve revenue stability with the help of long-standing strategic relationships, multi-year contracts and high contract renewal rates.
WEX has been actively acquiring and investing in companies, both in the United States and internationally, to expand its product and service offerings, thereby boosting its revenue growth and enhancing scalability. The June 2021 acquisition of benefitexpress has expanded WEX’s offerings in benefits administration by bringing in a complementary suite of solutions to its Health offerings. In 2020, WEX acquired eNett and Optal, both of which have strengthened the company’s position in the global travel marketplace.
Some Risks
WEX's current ratio at the end of second-quarter 2022 was pegged at 1.16, lower than the current ratio of 1.21 reported at the end of the previous quarter. Decreasing the current ratio is not desirable as it indicates that the company may have problems meeting its short-term debt obligations.
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Here's Why You Should Hold WEX Stock in Your Portfolio for Now
WEX Inc.’s (WEX - Free Report) stock has gained 19.4% year to date against a 5.9% decline in the industry it belongs to.
The company has an expected long-term (three to five years) earnings per share growth rate of 18.9%. Its 2022 and 2023 earnings are expected to grow 44.9% and 5.4% year over year, respectively.
WEX Inc. Price
WEX Inc. price | WEX Inc. Quote
Factors That Augur Well
WEX’s strategic revenue generation efforts include utilizing its extensive network of fuel and service providers, transaction volume growth, product excellence, marketing capabilities, and sales force productivity. Product and service quality and a deep understanding of customers’ operational needs have enabled WEX to achieve revenue stability with the help of long-standing strategic relationships, multi-year contracts and high contract renewal rates.
WEX has been actively acquiring and investing in companies, both in the United States and internationally, to expand its product and service offerings, thereby boosting its revenue growth and enhancing scalability. The June 2021 acquisition of benefitexpress has expanded WEX’s offerings in benefits administration by bringing in a complementary suite of solutions to its Health offerings. In 2020, WEX acquired eNett and Optal, both of which have strengthened the company’s position in the global travel marketplace.
Some Risks
WEX's current ratio at the end of second-quarter 2022 was pegged at 1.16, lower than the current ratio of 1.21 reported at the end of the previous quarter. Decreasing the current ratio is not desirable as it indicates that the company may have problems meeting its short-term debt obligations.
Zacks Rank and Stocks to Consider
WEX currently carries a Zacks Rank #3 (Hold).
Investors interestedin the broader Zacks Business Services sector can also consider stocks like 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 (Strong Buy) at present. CAR has an earnings growth rate of 108.4% for the year 2022. You can see the complete list of today’s Zacks #1 Rank stocks here.
Avis Budget delivered a trailing four-quarter earnings surprise of 69.5%, on average.
Genpact carries a Zacks Rank of 2 (Buy) at present. G has a long-term earnings growth expectation of 12.1%.
Genpact delivered a trailing four-quarter earnings surprise of 10.1%, on average.
CRA International currently sports a Zacks Rank #1. CRAI has a long-term earnings growth expectation of 14.3%.
CRAI delivered a trailing four-quarter earnings surprise of 26%, on average.