WEX Banks on Buyouts and Product Excellence, Debt Woes Stay

WEX Inc. WEX is benefiting from its extensive network of fuel and service providers, product excellence and acquisitions.

The company recently reported third-quarter 2021 adjusted earnings of $2.45 per share that surpassed the Zacks Consensus Estimate by 7% and increased more than 54% year over year. Total revenues of $482.8 million surpassed the consensus mark by 1% and increased 26% year over year.

WEX Inc. Price and Consensus

WEX Inc. price-consensus-chart | WEX Inc. Quote

How is WEX Doing?

WEX’s strategic revenue-generation efforts include utilizing its extensive network of fuel and service providers, transaction volume growth, product excellence, marketing capabilities, and sales force productivity.

The company has been actively acquiring and investing in companies, both in the United States as well as internationally, to expand its product and service offerings, thereby contributing to revenue growth and enhancing scalability.

The recently announced acquisition of benefitexpress is expected to expand WEX’s offerings in benefits administration by bringing in a complementary suite of solutions to its Health offerings. In 2020, WEX acquired eNett and Optal, both of which are expected to strengthen the company’s position in the global travel marketplace.

WEX’s cash and cash equivalent balance of $1.16 billion at the end of third-quarter 2021 was well below the long-term debt level of $2.8 billion. This underscores that the company does not have enough cash to meet this debt burden. Nevertheless, the cash level can meet the short-term debt of $183 million.

Zacks Rank and Stocks to Consider

WEX currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some other top-ranked stocks in the broader Business Services sector are Avis Budget CAR and Cross Country Healthcare CCRN, both sporting a Zacks Rank #1, and Charles River Associates CRAI, carrying a Zacks Rank #2 (Buy).

Avis Budget has an expected earnings growth rate of 453.5% for the current year. The company has a trailing four-quarter earnings surprise of 76.9%, on average.

Avis Budget’s shares have surged 575% in the past year. The company has a long-term earnings growth of 18.8%.

Cross Country Healthcare has an expected earnings growth rate of 447.8% for the current year. The company has a trailing four-quarter earnings surprise of 75%, on average.

Cross Country Healthcare’s shares have surged 192.2% in the past year. The company has a long-term earnings growth of 21.5%.

Charles River Associates has an expected earnings growth rate of 61.2% for the current year. The company has a trailing four-quarter earnings surprise of 51%, on average.

Charles River’s shares have surged 89.7% in the past year. The company has a long-term earnings growth of 15.5%.

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