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Reasons Why You Should Retain WEX in Your Portfolio Right Now
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WEXInc. (WEX - Free Report) 's robust organic growth and strategic acquisitions drive revenues and earnings. The recent Payzer acquisition aligns with its growth strategy. WEX strengthens its position with key acquisitions in healthcare and travel.
WEX gained 12.1% in the past year compared with its industry’s increase of 16.7% in the same time frame.
Factors in Favor
WEX's organic growth, driven by its extensive network, transaction volume, product excellence and strategic efforts, fuels solid revenue and earnings growth. Payment processing demand and operational efficiency are key contributors. Strategic acquisitions enhance scalability and product offerings. Optimistic about organic growth in all segments, we forecast 4.9% earnings per share (EPS) growth in 2023 and 10.8% EPS growth in 2024.
Recently, WEX has announced a definitive agreement to acquire Payzer, a cloud-based field service management software provider. This move aligns with WEX's growth strategy, thus expanding its product suite and creating cross-sell opportunities for its 150,000 small business customers in field service. Other acquisitions, such as the 2021 HealthcareBank division deal, enhance WEX's role in customer-directed healthcare. The benefitexpress acquisition in 2020 strengthens WEX's position in the healthcare ecosystem by combining benefit administration, compliance services, and consumer-directed health and lifestyle spending accounts. Strategic acquisitions of eNett and Optal in 2020 reinforce WEX's presence in the global travel marketplace.
WEX's revenue stability stems from high-quality products, services and a deep understanding of customer needs. Long-term strategic relationships, multi-year contracts and high renewal rates further contribute to this stability. With a large customer base and key partnerships, the company's healthy customer retention is driven by private-label portfolios and value-added offerings. Our 2023 revenue estimate for WEX is $2.5 billion, reflecting a 6.4% increase from the previous year.
Factors Against
WEX's current ratio at the end of third-quarter 2023 was pegged at 1.03, lower than the current ratio of 1.04 reported at the end of the previous quarter and 1.12 reported at the end of the year-ago quarter. This is less than the Financial Transaction Services industry’s current ratio of 1.25 during the second quarter of 2023. Decreasing the current ratio does not bode well.
WEX currently holds a Zacks Rank #3 (Hold).
Stocks to Consider
Here are a few better-ranked stocks from the Business Services sector:
Gartner (IT - Free Report) : The Zacks Consensus Estimate of Gartner’s 2023 revenues indicates 7.9% growth from the year-ago figure, while earnings are expected to decline 1.9%. The company has beaten the consensus estimate in all four quarters, with an average surprise of 34.4%.
DocuSign (DOCU - Free Report) : The Zacks Consensus Estimate of DOCU’s 2023 revenues indicates 8.6% growth from the year-ago figure, while earnings are expected to grow 29.1%. The company has beaten the consensus estimate in all four quarters, the average surprise being 27.1%.
DOCU holds a Zacks Rank #2 (Buy).
Broadridge Financial Solutions (BR - Free Report) : The Zacks Consensus Estimate of Broadridge’s 2023 revenues indicates 7.7% growth from the year-ago figure, while earnings are expected to grow 10.1%. The company has beaten the consensus estimate in three of the past four quarters and matched on one instance, the average surprise being 5.4%.
BR holds a Zacks Rank of 2.
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Reasons Why You Should Retain WEX in Your Portfolio Right Now
WEX Inc. (WEX - Free Report) 's robust organic growth and strategic acquisitions drive revenues and earnings. The recent Payzer acquisition aligns with its growth strategy. WEX strengthens its position with key acquisitions in healthcare and travel.
WEX gained 12.1% in the past year compared with its industry’s increase of 16.7% in the same time frame.
Factors in Favor
WEX's organic growth, driven by its extensive network, transaction volume, product excellence and strategic efforts, fuels solid revenue and earnings growth. Payment processing demand and operational efficiency are key contributors. Strategic acquisitions enhance scalability and product offerings. Optimistic about organic growth in all segments, we forecast 4.9% earnings per share (EPS) growth in 2023 and 10.8% EPS growth in 2024.
WEX Inc. Price
WEX Inc. price | WEX Inc. Quote
Recently, WEX has announced a definitive agreement to acquire Payzer, a cloud-based field service management software provider. This move aligns with WEX's growth strategy, thus expanding its product suite and creating cross-sell opportunities for its 150,000 small business customers in field service. Other acquisitions, such as the 2021 HealthcareBank division deal, enhance WEX's role in customer-directed healthcare. The benefitexpress acquisition in 2020 strengthens WEX's position in the healthcare ecosystem by combining benefit administration, compliance services, and consumer-directed health and lifestyle spending accounts. Strategic acquisitions of eNett and Optal in 2020 reinforce WEX's presence in the global travel marketplace.
WEX's revenue stability stems from high-quality products, services and a deep understanding of customer needs. Long-term strategic relationships, multi-year contracts and high renewal rates further contribute to this stability. With a large customer base and key partnerships, the company's healthy customer retention is driven by private-label portfolios and value-added offerings. Our 2023 revenue estimate for WEX is $2.5 billion, reflecting a 6.4% increase from the previous year.
Factors Against
WEX's current ratio at the end of third-quarter 2023 was pegged at 1.03, lower than the current ratio of 1.04 reported at the end of the previous quarter and 1.12 reported at the end of the year-ago quarter. This is less than the Financial Transaction Services industry’s current ratio of 1.25 during the second quarter of 2023. Decreasing the current ratio does not bode well.
WEX currently holds a Zacks Rank #3 (Hold).
Stocks to Consider
Here are a few better-ranked stocks from the Business Services sector:
Gartner (IT - Free Report) : The Zacks Consensus Estimate of Gartner’s 2023 revenues indicates 7.9% growth from the year-ago figure, while earnings are expected to decline 1.9%. The company has beaten the consensus estimate in all four quarters, with an average surprise of 34.4%.
IT sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
DocuSign (DOCU - Free Report) : The Zacks Consensus Estimate of DOCU’s 2023 revenues indicates 8.6% growth from the year-ago figure, while earnings are expected to grow 29.1%. The company has beaten the consensus estimate in all four quarters, the average surprise being 27.1%.
DOCU holds a Zacks Rank #2 (Buy).
Broadridge Financial Solutions (BR - Free Report) : The Zacks Consensus Estimate of Broadridge’s 2023 revenues indicates 7.7% growth from the year-ago figure, while earnings are expected to grow 10.1%. The company has beaten the consensus estimate in three of the past four quarters and matched on one instance, the average surprise being 5.4%.
BR holds a Zacks Rank of 2.