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Here's Why You Should Hold WEX Stock in Your Portfolio Now
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Key Takeaways
WEX's Q2 Corporate Payments revenues rose 5.8%, while Benefits revenues increased 5.6% y/y.
AI initiatives support faster credit decisions, as WEX targets more than 100 bps of margin expansion in H2'26.
WEX cut leverage to 2.9X and plans to direct most near-term adjusted free cash flow to share repurchases.
WEX (WEX - Free Report) stock has gained 19.6% over the past six months, outpacing the industry's marginal uptick. The Zacks S&P 500 Composite returned 19.5% over the same period.
6-Month Share Price Performance
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for WEX’s 2026 revenues is $2.9 billion, implying 8.4% year-over-year growth. For 2026 earnings per share, the consensus mark is $19.89, up 23.5%.
For 2027, the consensus mark for revenues is $2.9 billion, rising 1.6% year over year. Earnings per share are expected to increase 5.5% to $20.99.
Factors That Augur Well for WEX’s Success
Diversification Aids Growth Trajectory: In the second quarter of 2026, Corporate Payments revenues increased 5.8% year over year, and Benefits revenues rose 5.6%. Direct AP volume growth reached 20% year over year during the aforementioned quarter, with management anticipating mid-teens growth for the second half of the year. Early Benefits pipeline appears healthy for 2027. These indicators suggest that the broader revenue base beyond Mobility and additional growth channels will continue into 2027.
AI-Driven Efficiency Gains:The company is boosting AI integration across product development, credit decisions, operations and customer-centric offerings. AI-driven credit tools have allowed faster credit decisions without raising risks, while the company is implementing AI to enhance claims processing, coding and internal productivity. Management anticipates a margin expansion of more than 100 basis points (bps) in the second half of 2026 and 75 bps for the year.
Solid Capital Returns: WEX registered a $219-million year-over-year increment in the adjusted free cash flow (FCF) during the second quarter of 2026. Leverage declined to 2.9X as of June 30, 2026, from 3.1X as of March 31. Management utilized incremental first-half cash flows to lower leverage and brought the ratio within the 2.5X-3X target. Management anticipates channeling the majority of near-term adjusted free cash flow to share repurchases while maintaining its leverage range, creating a way to generate cash that supports per-share shareholder value.
Risks Faced by WEX
Turbulent Transaction Growth: In the second quarter of 2026, Corporate Payments purchase volume declined 3.6% year over year. Mobility payments registered marginal growth during that period. Corporate Payments weakness primarily reflected quarter-to-quarter timing from a large online-travel customer, while management said that trucking demand remains constrained by broader economic conditions. The travel-volume decline may reverse with timing and management described Mobility activity as stabilizing, but it did not provide a timeline for a trucking demand recovery.
High Debt Affects Financial Flexibility: The company's debt accounted for 72.4% of its total capital during the second quarter of 2026. It exceeds the industry average of 36.4%. WEX’s Credit Agreement leverage ratio dipped to 2.9X on June 30, 2026, from 3.1X as of March 31. Management expects to operate within a 2.5X-3X leverage range, planning to direct most near-term adjusted FCF toward share repurchases rather than deleveraging.
WEX’s Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
View the Zacks #1 Rank List
Image: Bigstock
Here's Why You Should Hold WEX Stock in Your Portfolio Now
Key Takeaways
WEX (WEX - Free Report) stock has gained 19.6% over the past six months, outpacing the industry's marginal uptick. The Zacks S&P 500 Composite returned 19.5% over the same period.
6-Month Share Price Performance
The Zacks Consensus Estimate for WEX’s 2026 revenues is $2.9 billion, implying 8.4% year-over-year growth. For 2026 earnings per share, the consensus mark is $19.89, up 23.5%.
For 2027, the consensus mark for revenues is $2.9 billion, rising 1.6% year over year. Earnings per share are expected to increase 5.5% to $20.99.
Factors That Augur Well for WEX’s Success
Diversification Aids Growth Trajectory: In the second quarter of 2026, Corporate Payments revenues increased 5.8% year over year, and Benefits revenues rose 5.6%. Direct AP volume growth reached 20% year over year during the aforementioned quarter, with management anticipating mid-teens growth for the second half of the year. Early Benefits pipeline appears healthy for 2027. These indicators suggest that the broader revenue base beyond Mobility and additional growth channels will continue into 2027.
AI-Driven Efficiency Gains:The company is boosting AI integration across product development, credit decisions, operations and customer-centric offerings. AI-driven credit tools have allowed faster credit decisions without raising risks, while the company is implementing AI to enhance claims processing, coding and internal productivity. Management anticipates a margin expansion of more than 100 basis points (bps) in the second half of 2026 and 75 bps for the year.
Solid Capital Returns: WEX registered a $219-million year-over-year increment in the adjusted free cash flow (FCF) during the second quarter of 2026. Leverage declined to 2.9X as of June 30, 2026, from 3.1X as of March 31. Management utilized incremental first-half cash flows to lower leverage and brought the ratio within the 2.5X-3X target. Management anticipates channeling the majority of near-term adjusted free cash flow to share repurchases while maintaining its leverage range, creating a way to generate cash that supports per-share shareholder value.
Risks Faced by WEX
Turbulent Transaction Growth: In the second quarter of 2026, Corporate Payments purchase volume declined 3.6% year over year. Mobility payments registered marginal growth during that period. Corporate Payments weakness primarily reflected quarter-to-quarter timing from a large online-travel customer, while management said that trucking demand remains constrained by broader economic conditions. The travel-volume decline may reverse with timing and management described Mobility activity as stabilizing, but it did not provide a timeline for a trucking demand recovery.
High Debt Affects Financial Flexibility: The company's debt accounted for 72.4% of its total capital during the second quarter of 2026. It exceeds the industry average of 36.4%. WEX’s Credit Agreement leverage ratio dipped to 2.9X on June 30, 2026, from 3.1X as of March 31. Management expects to operate within a 2.5X-3X leverage range, planning to direct most near-term adjusted FCF toward share repurchases rather than deleveraging.
WEX’s Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader Zacks Business Services sector are Figure Technology Solutions (FIGR - Free Report) and The Geo Group (GEO - Free Report) . These two companies presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Figure Technology has a long-term earnings growth expectation of 56.9%. FIGR delivered a trailing four-quarter earnings surprise of 28.2%, on average.
The Geo Group has a long-term earnings growth expectation of 14%. GEO delivered a trailing four-quarter earnings surprise of 28.2%, on average.