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WEX Stock Price Decreases 3% as Q1 Earnings Miss Estimates
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WEX Inc. (WEX - Free Report) reported unimpressive first-quarter 2024 results, wherein earnings and revenues missed the Zacks Consensus Estimates.
Lower-than-expected results disappointed investors as the stock declined 2.6% since the release of results on Apr 25.
WEX’s adjusted earnings (excluding 1.9 cents from non-recurring items) of $3.5 share missed the Zacks Consensus Estimate by a slight margin but increased 4.5% year over year. Revenues of $652.7 million missed the consensus estimate marginally but rose 6.7% from the year-ago quarter.
The WEX stock has gained 21.7% over the past six months, outperforming the 14% rally of the industry it belongs to and the 17% rise of the Zacks S&P 500 Composite.
The Mobility segment’s revenues declined 1% from the year-ago quarter to $339 million and missed our estimate of $363.9 million. The Corporate Payments segment’s revenues were $122.5 million, up 17% from first-quarter 2023. The same surpassed our estimate of $110.2 million. It is likely to have been driven by the rise in purchase volumes due to continued strength from travel customers.
The Benefits segment’s revenues increased 16% year over year to $191.2 million. The figure beat our estimate of $181.8 million. The full transition to the public cloud improved the company’s agility and platform strength, and using AI to process benefit claims is likely to have aided this segment’s revenue growth.
Operating Results
Adjusted operating income amounted to $251.3 million, up 9.2% from the year-ago quarter. The figure beat our estimate of $229.3 million. Adjusted operating income margin of 38.5% grew 90 basis points, beating our estimate of 35%.
Balance Sheet & Cash Flow
WEX exited first-quarter 2024 with cash and cash equivalents of $779.6 million compared with $975.8 million at the end of the preceding quarter.
The long-term debt (net) was $3.1 billion compared with $2.8 billion at the end of the previous quarter.
The company utilized $153.3 million in cash from operating activities in the reported quarter. The adjusted free cash flow utilized was $204.5 million. Capital expenditure totaled $34 million.
Q2 & 2024 Outlook
For second-quarter 2024, the company expects revenues of $675-$685 million compared with $650-$660 million previously. The mid-point ($680 million) of WEX’s revised guided range is higher than the Zacks Consensus Estimate of $678.4 million. The company anticipates adjusted diluted earnings per share of $3.75-$3.85 compared with $3.40-$3.50 stated previously. The Zacks Consensus Estimate for earnings is pegged at $3.92, higher than the company’s guided range.
For 2024, WEX anticipated revenues of $2.73-$2.77 billion, up from the prior stated $2.70-$2.74 billion. The mid-point ($2.75 billion) of the company’s revised guided range is higher than the Zacks Consensus Estimate of $2.74 billion. Adjusted earnings are expected to be $16.10-$16.60 per diluted share, an increase from the prior mentioned $15.90-$16.40. The mid-point ($16.35) of the same is higher than the consensus estimate for earnings of $16.20.
RSG’s earnings per share (excluding 1 cent from non-recurring items) of $1.5 beat the Zacks Consensus Estimate by 5.8% and increased 16.9% from the year-ago quarter. Revenues of $3.9 billion missed the consensus mark by a slight margin but increased 7.8% year over year.
VRSK’s adjusted earnings (excluding 11 cents from non-recurring items) were $1.6 per share, beating the Zacks Consensus Estimate by 7.2% and increasing 26.4% from the year-ago quarter. Total revenues of $704 million surpassed the consensus estimate marginally and increased 8% year over year on a reported basis and 6.9% on an organic constant currency basis.
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WEX Stock Price Decreases 3% as Q1 Earnings Miss Estimates
WEX Inc. (WEX - Free Report) reported unimpressive first-quarter 2024 results, wherein earnings and revenues missed the Zacks Consensus Estimates.
Lower-than-expected results disappointed investors as the stock declined 2.6% since the release of results on Apr 25.
WEX’s adjusted earnings (excluding 1.9 cents from non-recurring items) of $3.5 share missed the Zacks Consensus Estimate by a slight margin but increased 4.5% year over year. Revenues of $652.7 million missed the consensus estimate marginally but rose 6.7% from the year-ago quarter.
The WEX stock has gained 21.7% over the past six months, outperforming the 14% rally of the industry it belongs to and the 17% rise of the Zacks S&P 500 Composite.
WEX Inc. Price and EPS Surprise
WEX Inc. price-eps-surprise | WEX Inc. Quote
Segmental Revenues
The Mobility segment’s revenues declined 1% from the year-ago quarter to $339 million and missed our estimate of $363.9 million. The Corporate Payments segment’s revenues were $122.5 million, up 17% from first-quarter 2023. The same surpassed our estimate of $110.2 million. It is likely to have been driven by the rise in purchase volumes due to continued strength from travel customers.
The Benefits segment’s revenues increased 16% year over year to $191.2 million. The figure beat our estimate of $181.8 million. The full transition to the public cloud improved the company’s agility and platform strength, and using AI to process benefit claims is likely to have aided this segment’s revenue growth.
Operating Results
Adjusted operating income amounted to $251.3 million, up 9.2% from the year-ago quarter. The figure beat our estimate of $229.3 million. Adjusted operating income margin of 38.5% grew 90 basis points, beating our estimate of 35%.
Balance Sheet & Cash Flow
WEX exited first-quarter 2024 with cash and cash equivalents of $779.6 million compared with $975.8 million at the end of the preceding quarter.
The long-term debt (net) was $3.1 billion compared with $2.8 billion at the end of the previous quarter.
The company utilized $153.3 million in cash from operating activities in the reported quarter. The adjusted free cash flow utilized was $204.5 million. Capital expenditure totaled $34 million.
Q2 & 2024 Outlook
For second-quarter 2024, the company expects revenues of $675-$685 million compared with $650-$660 million previously. The mid-point ($680 million) of WEX’s revised guided range is higher than the Zacks Consensus Estimate of $678.4 million. The company anticipates adjusted diluted earnings per share of $3.75-$3.85 compared with $3.40-$3.50 stated previously. The Zacks Consensus Estimate for earnings is pegged at $3.92, higher than the company’s guided range.
For 2024, WEX anticipated revenues of $2.73-$2.77 billion, up from the prior stated $2.70-$2.74 billion. The mid-point ($2.75 billion) of the company’s revised guided range is higher than the Zacks Consensus Estimate of $2.74 billion. Adjusted earnings are expected to be $16.10-$16.60 per diluted share, an increase from the prior mentioned $15.90-$16.40. The mid-point ($16.35) of the same is higher than the consensus estimate for earnings of $16.20.
Currently, WEX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot
Republic Services, Inc. (RSG - Free Report) reported mixed first-quarter 2024 results.
RSG’s earnings per share (excluding 1 cent from non-recurring items) of $1.5 beat the Zacks Consensus Estimate by 5.8% and increased 16.9% from the year-ago quarter. Revenues of $3.9 billion missed the consensus mark by a slight margin but increased 7.8% year over year.
Verisk Analytics Inc. (VRSK - Free Report) reported impressive first-quarter 2024 results.
VRSK’s adjusted earnings (excluding 11 cents from non-recurring items) were $1.6 per share, beating the Zacks Consensus Estimate by 7.2% and increasing 26.4% from the year-ago quarter. Total revenues of $704 million surpassed the consensus estimate marginally and increased 8% year over year on a reported basis and 6.9% on an organic constant currency basis.