Oppenheimer has begun coverage on Wex (WEX, Financial) with a Perform rating, highlighting the company's robust standing in the fuel cards, corporate payments, and benefits administration sectors. According to the firm, Wex is well-positioned to benefit from significant growth trends within these markets. The company leverages competitive strengths through Wex Bank and its exclusive payment network, serving about 60% of the Fortune 1000 via its Benefits segment. This diversified exposure helps cushion the company from specific market weaknesses.
However, Oppenheimer also notes that Wex's clientele could be affected by an economic downturn, creating some uncertainty about when the company might achieve its medium-term objective of 5%-10% organic top-line growth. Overall, while Wex's strong market position is promising, economic conditions could impact its performance.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for WEX Inc (WEX, Financial) is $162.74 with a high estimate of $255.00 and a low estimate of $130.00. The average target implies an upside of 18.31% from the current price of $137.56. More detailed estimate data can be found on the WEX Inc (WEX) Forecast page.
Based on the consensus recommendation from 15 brokerage firms, WEX Inc's (WEX, Financial) average brokerage recommendation is currently 2.7, 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 $220.83, suggesting a upside of 60.53% from the current price of $137.56. 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: May 01, 2025
- Revenue: $636.6 million for Q1, a decrease of 2.5% year-over-year.
- Adjusted Net Income per Diluted Share: $3.51, an increase of 1.4% year-over-year.
- Mobility Segment Revenue: Declined 1.5% year-over-year.
- Benefits Segment Revenue: $199.3 million, an increase of 4.2% year-over-year.
- Corporate Payment Segment Revenue: $103.5 million, a decline of 15.5% year-over-year.
- Same Store Sales Growth - Local Fleets: Down 3.9%.
- Same Store Sales Growth - Over the Road Customers: Up 2.6%.
- HSA Accounts Growth: 7% increase, totaling over 8.5 million accounts.
- Direct AP Volume Growth: Nearly 25% increase year-over-year.
- Leverage Ratio: 3.5 times, at the high end of the long-term range.
- Share Repurchases: $790 million returned to investors, reducing share count by approximately 13.1%.
- Q2 Revenue Guidance: Expected to be between $640 million and $660 million.
- Full Year Revenue Guidance: Expected to be between $2.57 billion and $2.63 billion.
- Full Year Adjusted EPS Guidance: Expected to be between $14.72 and $15.32 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 adjusted net income per diluted share of $3.51, a 1.4% increase compared to the same quarter last year, with adjusted EPS growing 5% excluding fuel price and foreign exchange fluctuations.
- The company maintained high customer retention rates, even during economic uncertainty, highlighting the strength of its value proposition.
- WEX Inc (WEX) successfully extended partnerships with major industry players like Circle K, Enterprise Fleet Management, and JB Hunt, demonstrating strong market trust.
- The benefits segment saw a 7% growth in HSA accounts, outperforming the industry average of 5%, indicating competitive strength.
- The corporate payment segment's direct accounts payable product experienced a 25% growth in volume, showcasing strong new account growth despite economic challenges.
Negative Points
- Total revenue for the quarter was $636.6 million, a decrease of 2.5% year over year, impacted by lower fuel prices and foreign exchange rates.
- The mobility segment saw a decline in transaction levels, partly due to external factors like weather events, with same-store sales for local fleets down 3.9%.
- The corporate payment segment's revenue declined by 15.5% year over year, largely due to a major travel customer's transition to a new operating model.
- WEX Inc (WEX) faces macroeconomic uncertainties, including potential impacts from US tariff policies and a softening economic environment.
- The company anticipates a $31 million net negative impact on revenue for the full year due to fuel prices, interest rates, and foreign exchange fluctuations.
