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The stock declined 4.7% since the release of results on Oct. 24 due to earnings and revenues miss, and a weak guidance.
For the fourth quarter of 2024, the company lowered its revenue guidance to $630-$640 million from the $688-$698 million provided in the preceding quarter. The mid-point ($635 million) of WEX’s revised guidance range is higher than the Zacks Consensus Estimate of $633.8 million.
The company reduced its adjusted diluted earnings per share view to $3.51-$3.61 from the $4.42-$4.52 given in the preceding quarter. The revised guidance range is lower than the consensus estimate for earnings of $3.66 per share.
For 2024, the company lowered its revenue guidance to $2.62-$2.63 billion from $2.68-$2.72 billion given in the previous quarter. The guided range is lower than the Zacks Consensus Estimate for revenues of $2.64 billion.
WEX lowered adjusted diluted earnings per share to $15.21-$15.31 from the $15.98-$16.38 provided in the preceding quarter. The company’s revised guidance is lower than the consensus estimate for earnings of $15.38 per share.
Quarterly adjusted earnings (excluding $1.8 from non-recurring items) of $4.4 share missed the Zacks Consensus Estimate by 1.6% but increased 7.4% from the year-ago quarter. Revenues of $665.5 million missed the consensus estimate by 3.3% but rose 2.2% on a year-over-year basis.
The WEX stock has declined 18.1% over the past six months against the 14.4% rise of the industry it belongs to and the 15.4% rally of the Zacks S&P 500 Composite.
Six Months Price Performance
Image Source: Zacks Investment Research
Segmental Revenues of WEX
The Mobility segment’s revenues increased 2% from the year-ago quarter to $357.2 million and surpassed our estimate of $352.2 million. Incremental investments in sales and marketing, mainly in digital marketing, drove signings, which resulted in this segment’s revenue growth. The Corporate Payments segment’s revenues were $126.9 million, down 6.1% from the third quarter of 2023. The same missed our estimate of $155.2 million.
The Benefits segment’s revenues increased 9.3% year over year to $181.5 million. The figure missed our projection of $185.5 million. Strong core market dynamics that grew the SaaS accounts have fueled this segment’s revenue growth.
WEX’s Operating Results
Adjusted operating income rose 12.3% to $196.4 million from the year-ago quarter. The figure missed our estimate of $271.8 million. The adjusted operating income margin of 47.6% grew 130 basis points year over year, beating our projected 39.2%.
Balance Sheet & Cash Flow of WEX
WEX exited the third quarter of 2024 with cash and cash equivalents of $682.6 million compared with $7 million at the end of the preceding quarter. The long-term debt (net) was $3 billion compared with $3.1 billion at the end of the previous quarter.
The company utilized $7 million in cash from operating activities in the reported quarter. The adjusted free cash flow utilized was $161.1 million. Capital expenditure totaled $39.6 million.
VRSK’s adjusted earnings (excluding 13 cents from non-recurring items) were $1.7 per share, surpassing the Zacks Consensus Estimate by 4.4% and growing 9.9% from the year-ago quarter. Total revenues of $725.3 million beat the consensus estimate marginally and increased 7% on a year-over-year basis.
Automatic Data Processing, Inc. (ADP - Free Report) posted impressive first-quarter fiscal 2025 results.
ADP’s earnings per share of $2.3 beat the consensus estimate by 5.9% and increased 12% from the year-ago quarter. Total revenues of $4.8 billion beat the consensus estimate by 1.5% and grew 7.1% on a year-over-year basis.
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WEX Stock Price Decreases 5% Post Q3 Earnings & Revenues Miss
WEX Inc. (WEX - Free Report) reported dismal third-quarter 2024 results, wherein earnings and revenues missed the Zacks Consensus Estimates.
See Zacks Earnings Calendar to stay ahead of market-making news.
The stock declined 4.7% since the release of results on Oct. 24 due to earnings and revenues miss, and a weak guidance.
For the fourth quarter of 2024, the company lowered its revenue guidance to $630-$640 million from the $688-$698 million provided in the preceding quarter. The mid-point ($635 million) of WEX’s revised guidance range is higher than the Zacks Consensus Estimate of $633.8 million.
The company reduced its adjusted diluted earnings per share view to $3.51-$3.61 from the $4.42-$4.52 given in the preceding quarter. The revised guidance range is lower than the consensus estimate for earnings of $3.66 per share.
For 2024, the company lowered its revenue guidance to $2.62-$2.63 billion from $2.68-$2.72 billion given in the previous quarter. The guided range is lower than the Zacks Consensus Estimate for revenues of $2.64 billion.
WEX lowered adjusted diluted earnings per share to $15.21-$15.31 from the $15.98-$16.38 provided in the preceding quarter. The company’s revised guidance is lower than the consensus estimate for earnings of $15.38 per share.
Quarterly adjusted earnings (excluding $1.8 from non-recurring items) of $4.4 share missed the Zacks Consensus Estimate by 1.6% but increased 7.4% from the year-ago quarter. Revenues of $665.5 million missed the consensus estimate by 3.3% but rose 2.2% on a year-over-year basis.
The WEX stock has declined 18.1% over the past six months against the 14.4% rise of the industry it belongs to and the 15.4% rally of the Zacks S&P 500 Composite.
Six Months Price Performance
Segmental Revenues of WEX
The Mobility segment’s revenues increased 2% from the year-ago quarter to $357.2 million and surpassed our estimate of $352.2 million. Incremental investments in sales and marketing, mainly in digital marketing, drove signings, which resulted in this segment’s revenue growth. The Corporate Payments segment’s revenues were $126.9 million, down 6.1% from the third quarter of 2023. The same missed our estimate of $155.2 million.
The Benefits segment’s revenues increased 9.3% year over year to $181.5 million. The figure missed our projection of $185.5 million. Strong core market dynamics that grew the SaaS accounts have fueled this segment’s revenue growth.
WEX’s Operating Results
Adjusted operating income rose 12.3% to $196.4 million from the year-ago quarter. The figure missed our estimate of $271.8 million. The adjusted operating income margin of 47.6% grew 130 basis points year over year, beating our projected 39.2%.
Balance Sheet & Cash Flow of WEX
WEX exited the third quarter of 2024 with cash and cash equivalents of $682.6 million compared with $7 million at the end of the preceding quarter. The long-term debt (net) was $3 billion compared with $3.1 billion at the end of the previous quarter.
The company utilized $7 million in cash from operating activities in the reported quarter. The adjusted free cash flow utilized was $161.1 million. Capital expenditure totaled $39.6 million.
WEX carries a Zacks Rank #5 (Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot of WEX’s Peers
Verisk Analytics Inc. (VRSK - Free Report) reported impressive third-quarter 2024 results.
VRSK’s adjusted earnings (excluding 13 cents from non-recurring items) were $1.7 per share, surpassing the Zacks Consensus Estimate by 4.4% and growing 9.9% from the year-ago quarter. Total revenues of $725.3 million beat the consensus estimate marginally and increased 7% on a year-over-year basis.
Automatic Data Processing, Inc. (ADP - Free Report) posted impressive first-quarter fiscal 2025 results.
ADP’s earnings per share of $2.3 beat the consensus estimate by 5.9% and increased 12% from the year-ago quarter. Total revenues of $4.8 billion beat the consensus estimate by 1.5% and grew 7.1% on a year-over-year basis.