WEX Inc. (WEX - Free Report) is a lucrative financial transaction services stock and its strong fundamentals could ensure a continued bull run.
Here are a few reasons why the stock is worth considering.
A look at the company’s price trend reveals that the stock has had an impressive run on the bourse year to date. WEX has gained 39.8%, significantly outperforming the industry’s 26.9% rally.
WEX carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 offer attractive investment opportunities to investors. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions
For the current year, five estimates have moved north over the past 60 days versus one southward revision, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for the current year moved up 0.6%.
Positive Earnings Surprise History
WEX has an impressive earnings surprise history. The company has outpaced the Zacks Consensus Estimate in each of the trailing four quarters, with an average positive earnings surprise of 3%.
The company’s Zacks Consensus Estimate for 2018 earnings of $8.09 reflects year-over-year growth of 49.5%. Moreover, earnings are expected to register 16.1% growth in 2019. The stock has long-term expected earnings per share growth rate of 15%.
Key Growth Drivers
WEX’s top line continues to grow organically, courtesy of its extensive network of fuel and service providers, transaction volume growth, product excellence, marketing capabilities, sales force productivity and other strategic revenue generation efforts.
WEX Inc. Revenue (TTM)
Robust demand for its payment processing, account servicing and transaction processing services along with operational efficiency has helped WEX to generate solid revenues and earnings. Moving ahead, WEX is highly optimistic about organic growth opportunities across each of its segments.
Acquisitions have been one of the key catalysts for WEX. Last year, WEX purchased certain assets and assumed certain liabilities of AOC to strengthen its technological capabilities. In 2016, the company acquired EFS for enhancing its fleet solutions suite. In 2015, the company purchased Benaissance and acquired the remaining 49% ownership in UNIK S.A.
Apart from contributing to revenue growth, these buyouts have added differentiation to the company’s products and services offerings, thereby enhancing scalability.
Other Stocks to Consider
Some other top-ranked stocks in the broader Business Services sector include Broadridge Financial Solutions (BR - Free Report) , Paychex (PAYX - Free Report) and Convergys , each carrying a Zacks Rank of 2.
The long-term expected earnings per share growth rate for Broadridge Financial Solutions, Paychex and Convergys is 10%, 8.2% and 7.5%, respectively.
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