WEX (WEX) AI Stock Analysis

Compare

589 Followers

WEX Dividends

Top Page

WEX

(NYSE:WEX)

60Neutral

WEX's overall score reflects strong revenue growth and profitability improvements, but is tempered by high financial leverage and cash flow concerns. The technical analysis indicates bearish trends, and valuation metrics suggest the stock is fairly priced. Earnings call insights reveal mixed performance with potential growth opportunities, but ongoing challenges weigh on the outlook.

Positive Factors

Business Confidence

The recently announced tender offer signals WEX’s confidence in the business and emphasizes their view that shares are currently undervalued.

Financial Performance

WEX delivered a sound 1Q print against lowered expectations with revenues and adjusted EPS beating forecasts.

Negative Factors

Growth Targets

WEX has lowered long-term growth targets for organic revenue and adjusted EPS, indicating growth challenges.

Revenue Growth

First-quarter organic revenue contracted 0.8% year-over-year, decelerating by about 1 point from the fourth quarter.

Structural Challenges

Limited upside in shares given structural challenges and lack of clear catalysts in WEX’s non-mobility segments, which account for more than 45% of revenue.

WEX (WEX) vs. S&P 500 (SPY)

Market Cap

$4.19B

Dividend YieldN/A

Average Volume (3M)1.20M

Price to Earnings (P/E)15.8

Beta (1Y)1.08

Revenue Growth0.90%

EPS Growth26.13%

CountryUS

Employees6,500

SectorTechnology

Sector Strength66

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)3.51

Shares Outstanding34,244,545

10 Day Avg. Volume605,329

30 Day Avg. Volume1,200,031

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.59

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit4.20

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$158.57

Price Target Upside25.13% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering8

WEX Business Overview & Revenue Model

Company DescriptionWEX Inc. provides financial technology services in the United States and internationally. It operates through three segments: Fleet Solutions, Travel and Corporate Solutions, and Health and Employee Benefit Solutions. The Fleet Solutions segment offers fleet vehicle payment processing services. Its services include customer, account activation, and account retention services; authorization and billing inquiries, and account maintenance services; credit and collections services; merchant services; analytics solutions with access to web-based data analytics platform that offers insights to fleet managers; and ancillary services and tools to fleets to manage expenses and capital requirements. This segment markets its products directly and indirectly to commercial and government vehicle fleet customers with small, medium, and large fleets, as well as with over-the-road and long haul fleets; and indirectly through co-branded and private label relationships. The Travel and Corporate Solutions segment provides payment solutions, including embedded payments; and accounts payable automation and spend management solutions. Its products include virtual cards that are used for transactions where no card is presented. This segment markets its products directly and indirectly to commercial and government organizations. The Health and Employee Benefit Solutions segment offers healthcare payment products and software-as-a-service consumer directed platforms for healthcare market, as well as payroll related and employee benefit products in Brazil. This segment markets its products through health plans, third-party administrators, financial institutions, payroll companies benefits consultants, software providers, and individuals. The company was formerly known as Wright Express Corporation and changed its name to WEX Inc. in October 2012. WEX Inc. was founded in 1983 and is based in Portland, Maine.

How the Company Makes MoneyWEX Inc. generates revenue through a diverse range of payment processing services tailored to specific industries. In its Fleet Solutions segment, WEX earns money by offering fuel card services that help businesses manage fleet expenses efficiently. The Travel and Corporate Solutions segment provides virtual payment solutions for travel and corporate expenses, earning fees from transaction processing and management. Meanwhile, the Health and Employee Benefit Solutions segment generates revenue by administering and managing health benefit accounts, such as Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs), often earning fees from account management and transaction processing. Significant partnerships with financial institutions, travel companies, and healthcare providers enhance WEX's service offerings and expand its market reach, further contributing to its revenue streams.

WEX Financial Statement Overview

Summary

WEX has demonstrated strong revenue growth and improved profitability, with a net profit margin rising to 12.1% and robust EBITDA margins. However, financial leverage is a concern, as indicated by a high debt-to-equity ratio, and cash flow management needs attention with significant reductions in free cash flow affecting liquidity.

Income Statement

Positive

WEX has shown robust revenue growth over the years with a strong progression from $1.56 billion in 2020 to $2.61 billion in TTM (Trailing-Twelve-Months) 2025. Gross profit margins have been consistently high, hovering around 70%. The net profit margin has improved significantly from a negative in 2020 to 12.1% in TTM 2025, indicating better cost management and operational efficiency. The EBITDA margin has also shown strength, indicating healthy core earnings. However, there is a slight decline in EBIT margin from 2024 to TTM 2025, which might suggest increasing operating expenses.

Balance Sheet

Positive

WEX's balance sheet shows a decrease in stockholders' equity from 2024 to TTM 2025, leading to a higher debt-to-equity ratio of 1.83, which is a concern for financial stability. The equity ratio has also decreased to 5.8% in TTM 2025, indicating a lower proportion of equity financing. However, the company has maintained a solid asset base, and return on equity has improved to 38.9% in TTM 2025, which is a positive sign of profitability relative to shareholder equity.

Cash Flow

Neutral

WEX's cash flow from operations has seen fluctuations, with a significant drop in TTM 2025. The free cash flow has also decreased notably from $334.1 million in 2024 to $2.1 million in TTM 2025, raising concerns about liquidity and cash management. The operating cash flow to net income ratio is 0.49 in TTM 2025, suggesting some challenges in converting income into cash flow. The free cash flow to net income ratio is very low, indicating potential strain on cash reserves for future investments and obligations.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.63B	2.55B	2.35B	1.85B	1.56B
	Gross Profit
1.59B	1.49B	1.42B	1.15B	886.69M
	EBIT
686.30M	647.10M	469.84M	342.00M	171.06M
	EBITDA
975.00M	849.20M	649.87M	630.66M	133.77M
	Net Income Common Stockholders
309.60M	266.60M	201.40M	136.14M	-280.48M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.36B	4.00B	2.32B	1.54B	852.03M
	Total Assets
13.32B	13.88B	11.53B	10.31B	8.18B
	Total Debt
4.38B	3.87B	2.72B	2.85B	3.03B
	Net Debt
3.78B	2.89B	1.80B	2.26B	2.17B
	Total Liabilities
11.83B	12.06B	9.88B	8.21B	6.15B
	Stockholders Equity
1.49B	1.82B	1.65B	1.84B	1.90B
Cash Flow		Free Cash Flow
334.10M	763.90M	563.21M	64.36M	776.55M
	Operating Cash Flow
481.40M	907.90M	679.42M	150.40M	857.02M
	Investing Cash Flow
-960.60M	-2.14B	-716.65M	-1.60B	-329.09M
	Financing Cash Flow
-260.30M	1.57B	681.26M	1.40B	-179.26M

WEX Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price126.72

Price Trends

50DMA

140.85

Negative

100DMA

156.00

Negative

200DMA

172.78

Negative

Market Momentum

MACD

-4.58

Negative

RSI

45.52

Neutral

STOCH

21.10

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WEX, the sentiment is Neutral. The current price of 126.72 is above the 20-day moving average (MA) of 125.72, below the 50-day MA of 140.85, and below the 200-day MA of 172.78, indicating a neutral trend. The MACD of -4.58 indicates Negative momentum. The RSI at 45.52 is Neutral, neither overbought nor oversold. The STOCH value of 21.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WEX.

WEX Risk Analysis

WEX disclosed 57 risk factors in its most recent earnings report. WEX reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

WEX Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACIW	78 Outperform	$5.72B	28.45	14.78%	―	13.11%	91.21%
CVLT	76 Outperform	$7.59B	103.14	25.23%	―	18.63%	-55.09%
EEFT	75 Outperform	$4.52B	15.46	25.00%	―	7.73%	19.76%
VNT	75 Outperform	$4.94B	13.62	35.88%	0.30%	-3.59%	-11.30%
QTWO	63 Neutral	$4.94B	―	-3.95%	―	13.12%	75.24%
WEX	60 Neutral	$4.19B	15.75	24.37%	―	0.90%	26.13%
Sector *	60 Neutral	$10.83B	10.47	-6.71%	2.99%	7.73%	-12.97%

* Technology Sector Average

Performance Comparison

WEX

126.72

-81.65

-39.19%

ACIW

ACI Worldwide

48.46

12.29

33.98%

CVLT

CommVault Systems

174.79

63.75

57.41%

EEFT

Euronet Worldwide

107.38

-6.91

-6.05%

QTWO

Q2 Holdings

90.79

27.92

44.41%

VNT

Vontier

34.88

-5.59

-13.81%

WEX Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: -2.80%|

Next Earnings Date:Jul 24, 2025

Earnings Call Sentiment Neutral

The earnings call reflected a period of mixed performance for WEX. While the company saw growth in adjusted EPS, customer retention, and benefits segment revenues, challenges in the mobility and corporate payments segments led to a decline in overall revenue. The strategic investments and strong new application volumes indicate potential for future growth, but current economic uncertainties and specific segment challenges weigh on the outlook.

Q1-2025 Updates

Positive Updates

Stable Customer Retention

Despite economic uncertainties, WEX has maintained high customer retention across its segments, indicating trust and value in its offerings.

Increase in Adjusted EPS

Adjusted net income per diluted share was $3.51, an increase of 1.4% compared to the same period last year, and it grew 5% excluding fluctuations in fuel prices and foreign exchange rates.

Benefits Segment Growth

The Benefits segment saw a 4.2% increase in total revenues year-over-year, with HSA accounts growing by 7% in Q1, outperforming the market growth of 5%.

Strong New Application Volumes

Mobility segment's new application volumes outperformed the prior year by 18%, indicating strong demand and effective marketing strategies.

Direct AP Volume Growth

Within the Corporate Payments segment, direct AP volume grew nearly 25% compared to last year, showcasing robust demand for AP automation solutions.

Negative Updates

Overall Revenue Decline

Q1 revenue was $636.6 million, a decrease of 2.5% year-over-year, with a 1.7% impact from foreign exchange rates and lower fuel prices.

Mobility Segment Revenue Decline

Mobility segment revenue declined 1.5% during Q1 compared to last year, including a drag of 2.9% due to lower fuel prices and foreign exchange rates.

Corporate Payments Segment Decline

Revenues in the Corporate Payments segment decreased by 15.5% year-over-year, largely due to a customer transitioning to a new operating model.

Weather Impact on Mobility

Transaction levels in the Mobility segment were down partly due to weather events across the U.S., affecting same-store sales growth for local fleets.

Company Guidance

During the WEX First Quarter 2025 Earnings Call, guidance was provided using both GAAP and non-GAAP metrics. Revenue for Q1 was $636.6 million, a 2.5% decline year-over-year, and adjusted net income per diluted share was $3.51, a 1.4% increase. Excluding fluctuations in fuel prices and foreign exchange rates, revenue decreased by 0.8%, and adjusted EPS grew by 5%. The company expects Q2 revenue to be between $640 million and $660 million, with adjusted EPS ranging from $3.60 to $3.80. For the full year, WEX projects revenue between $2.57 billion and $2.63 billion and adjusted EPS from $14.72 to $15.32 per diluted share. The guidance reflects current economic conditions, factoring in macroeconomic impacts such as fuel prices, FX, and interest rates, while maintaining a focus on strategic investments to drive growth.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.