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WEX Stock Rises 36.3% in Three Months: Here's What You Should Know
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Key Takeaways
WEX shares jumped 36.3% in three months as all three segments posted year-over-year revenue growth.
WEX's Q2 adjusted operating margin rose 280 basis points to 39.6%, while adjusted EPS climbed 10.1%.
WEX cut leverage to 2.9X and plans to direct most near-term adjusted free cash flow toward share buybacks.
WEX (WEX - Free Report) stock has gained 36.3% over the past three months, significantly outperforming the industry’s 9.5% growth and the Zacks S&P 500 Composite's 3% return.
WEX Three-Month Share Price Performance
Image Source: Zacks Investment Research
Let us delve deeper into the factors that have contributed to the company’s outperformance.
Broad-Based Segment Results Drive Growth
WEX is benefiting from broad-based growth across its diversified business mix. Mobility, its largest segment, generated $422.4 million in second-quarter 2026 revenues, up 22% year over year. Benefits revenues rose 5.6% to $206 million, while Corporate Payments increased 5.8% to $125.1 million. Total volume grew 15.7% to $68.9 billion, reflecting healthy customer activity and supporting multiple avenues for growth into 2027.
AI Integration & Pricing Actions Support Margin Expansion
WEX’s adjusted operating margin expanded about 280 basis points year over year to 39.6% in the second quarter of 2026, helped by higher fuel prices that increased revenues without a proportional rise in most operating costs. Excluding fuel-price and foreign-exchange effects, revenues grew 4.2%, while adjusted EPS increased 10.1%, reflecting healthy underlying execution. WEX also continues to deploy AI across credit adjudication, claims processing, development and other workflows, alongside pricing initiatives. These productivity and pricing actions should support margins in the second half of 2026 even without further fuel-price benefits.
Improving Leverage Enables Greater Capital Returns
WEX ended the second quarter of 2026 with leverage of 2.9X, down from 3.1X in the first quarter. Adjusted free cash flow increased to $219 million from $194.3 million a year earlier, despite operating cash use of $77.6 million. The company repurchased about $60 million of shares during the quarter and another $33 million through July 20. Management expects to direct most near-term adjusted free cash flow toward buybacks, supporting per-share value creation.
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WEX Stock Rises 36.3% in Three Months: Here's What You Should Know
Key Takeaways
WEX (WEX - Free Report) stock has gained 36.3% over the past three months, significantly outperforming the industry’s 9.5% growth and the Zacks S&P 500 Composite's 3% return.
WEX Three-Month Share Price Performance
Image Source: Zacks Investment Research
Let us delve deeper into the factors that have contributed to the company’s outperformance.
Broad-Based Segment Results Drive Growth
WEX is benefiting from broad-based growth across its diversified business mix. Mobility, its largest segment, generated $422.4 million in second-quarter 2026 revenues, up 22% year over year. Benefits revenues rose 5.6% to $206 million, while Corporate Payments increased 5.8% to $125.1 million. Total volume grew 15.7% to $68.9 billion, reflecting healthy customer activity and supporting multiple avenues for growth into 2027.
AI Integration & Pricing Actions Support Margin Expansion
WEX’s adjusted operating margin expanded about 280 basis points year over year to 39.6% in the second quarter of 2026, helped by higher fuel prices that increased revenues without a proportional rise in most operating costs. Excluding fuel-price and foreign-exchange effects, revenues grew 4.2%, while adjusted EPS increased 10.1%, reflecting healthy underlying execution. WEX also continues to deploy AI across credit adjudication, claims processing, development and other workflows, alongside pricing initiatives. These productivity and pricing actions should support margins in the second half of 2026 even without further fuel-price benefits.
Improving Leverage Enables Greater Capital Returns
WEX ended the second quarter of 2026 with leverage of 2.9X, down from 3.1X in the first quarter. Adjusted free cash flow increased to $219 million from $194.3 million a year earlier, despite operating cash use of $77.6 million. The company repurchased about $60 million of shares during the quarter and another $33 million through July 20. Management expects to direct most near-term adjusted free cash flow toward buybacks, supporting per-share value creation.
WEX’s Zacks Rank & Stocks to Consider
WEX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A couple of better-ranked stocks in the broader Business Services sector are Thomson Reuters Corporation (TRI - Free Report) and Veralto Corporation (VLTO - Free Report) .
Thomson Reuters carries a Zacks Rank #2 (Buy) at present. It has a long-term earnings growth expectation of 11.7%.
TRI delivered a trailing four-quarter earnings surprise of 2.7%, on average.
Veralto also holds a Zacks Rank of 2 at present. It has a long-term earnings growth expectation of 8%.
VLTO beat earnings estimates in each of the trailing four quarters, with an average earnings surprise of 6.6%.