WEX reported a successful first quarter with revenue totaling $636.6 million, surpassing the expected $632.49 million. This performance reflects the company's strong financial standing and strategic initiatives. According to WEX's Chair, CEO, and President, Melissa Smith, the diverse portfolio of the company offers significant resilience against sector-specific downturns, enabling it to effectively handle ongoing market uncertainties. The results reinforce WEX's ability to maintain stability and growth despite broader economic challenges.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 13 analysts, the average target price for WEX Inc (WEX, Financial) is $168.07 with a high estimate of $255.00 and a low estimate of $130.00. The average target implies an upside of 28.92% from the current price of $130.37. More detailed estimate data can be found on the WEX Inc (WEX) Forecast page.
Based on the consensus recommendation from 16 brokerage firms, WEX Inc's (WEX, Financial) average brokerage recommendation is currently 2.8, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for WEX Inc (WEX, Financial) in one year is $224.24, suggesting a upside of 72% from the current price of $130.37. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the WEX Inc (WEX) Summary page.
WEX Key Business Developments
Release Date: February 06, 2025
- Full Year Revenue: $2.6 billion, a 3% increase year over year.
- Full Year Adjusted Net Income Per Share Growth: 3% year over year.
- Fourth Quarter Revenue: $637 million, a 4% decrease year over year.
- Fourth Quarter Adjusted Net Income Per Diluted Share: $3.57, a 6.5% decrease year over year.
- Mobility Segment Revenue Decline: 1.4% in Q4, impacted by fuel prices and foreign exchange rates.
- Benefits Segment Revenue Growth: 4.9% year over year in Q4.
- Corporate Payments Segment Revenue Decline: 22.7% year over year in Q4.
- Leverage Ratio: 2.6 times, at the low end of the long-term range.
- First Quarter 2025 Revenue Guidance: $625 million to $640 million.
- First Quarter 2025 Adjusted EPS Guidance: $3.35 to $3.50 per diluted share.
- Full Year 2025 Revenue Guidance: $2.6 billion to $2.66 billion.
- Full Year 2025 Adjusted EPS Guidance: $14.65 to $15.25 per diluted share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- WEX Inc (WEX, Financial) reported a record high revenue of $2.6 billion for the full year, growing 3% compared to the prior year despite headwinds from fuel prices and foreign exchange rates.
- The company has introduced supplemental materials for investors to better understand and analyze their performance, indicating a commitment to transparency.
- WEX Inc (WEX) is making targeted investments in sales and marketing across all segments, which are expected to yield returns within two years.
- The company is optimistic about the growth potential in its Corporate Payments segment, particularly with new product offerings and increased sales efforts.
- WEX Inc (WEX) maintains a strong balance sheet with a leverage ratio of 2.6 times, providing flexibility for capital optimization and strategic investments.
Negative Points
- Fourth-quarter revenue decreased by 4% year over year, with adjusted net income per diluted share also declining by 6.5%.
- The company has adjusted its long-term organic revenue growth targets from 8%-12% to 5%-10%, reflecting updated market insights and slower growth expectations.
- WEX Inc (WEX) experienced pressure from macroeconomic factors such as fuel prices, foreign exchange rates, and a trucking recession, impacting growth.
- The Corporate Payments segment saw a 22.7% decline in revenue year over year, attributed to contract renegotiations and temporary volume reductions from large customers.
- The Benefits segment experienced a moderation in growth due to industry trends and the loss of a Medicare Advantage customer, impacting overall performance.
