FleetCor Technologies Inc.
(
FLT
) raised its guidance for 2012 and delivered an 11.3% positive
earnings surprise in the second quarter, marking the sixth quarter
of outperformance in the last seven. This Zacks #1 Rank (Strong
Buy) provider of fuel cards and workforce payment products also
offers an estimated long-term earnings upside of 21.6%.
Solid Second Quarter Results
On August 8, 2012, FleetCor Technologies reported second quarter
net income of 69 cents, higher than the Zacks Consensus Estimate of
62 cents and increasing 21.1% from the year-ago earrings.
The top line improved 28% year over year to $171.8 million. The
improvement was fueled by a 56.1% surge in the International
segment and a 15.5% increase in the North American segment.
Operating expenses escalated 22% to $90.4 million. However, the
magnitude of revenue growth was higher than the increase in
expense, thereby helping operating income to improve 36% year over
year to $81.4 million.
Recently, FleetCor Technologies forayed into the Brazilian market
by acquiring CTF Technologies Inc. for $180 million. It also
acquired a leading Russian fuel card company and agreed to buy the
Mexican assets of NovoPayment's subsidiaries Tebca and Servitebca.
Guidance
FleetCor Technologies revised its 2012 revenue expectation to
between $665 million and $675 million from the prior range of $615
million to $625 million.
The adjusted net income estimate was raised to a range of $235
million to $240 million, from $217 million to $222 million earlier.
Concurrently, adjusted net income per share is estimated between
$2.74 and $2.78, up from $2.55 to $2.60.
Positive Estimate Revision
For 2012, the Zacks Consensus Estimate is currently pegged at
$2.64, up nearly 7.8% over the last 30 days as all four estimates
were revised upward. This also suggests a year-over-year increase
of 32.8%.
Likewise for 2013, the Zacks Consensus Estimate of $3.06 improved
10.1% as all four estimates moved upward. The current estimate
represents a year-over-year increase of 15.9%.
Premium Valuation
Shares of FleetCor Technologies are roughly trading at 16.2x the
earnings estimate for 2012, a premium of 42% to the peer group
average of 11.4x. On a price-to-book (P/B) basis, shares are
trading at 3.8x compared with the peer group average of 1.8x. The
PEG ratio is 0.74 times, 26.0% below the benchmark of 1 for a
fairly priced stock.
FleetCor Technologies has a trailing 12-month ROE of 22.8% compared
with the peer group average of 19.9%.
The price and consensus chart below shows that the earnings
estimate lines for 2012 and 2013 are fairly above the stock price,
indicating that FleetCor Technologies is undervalued.
Headquartered in Norcross, Georgia, FleetCor Technologies was
founded in 1986 and offers specialized payment products and
services to businesses, commercial fleets, oil companies, petroleum
marketers, and government entities. With 2,130 employees it
provides services in North America, Latin America and Europe.
FleetCor Technologies has a market capitalization of $3.57 billion
and competes with U.S. Bancorp (
USB
) and Wright Express Corp. (
WXS
).
FLEETCOR TECH (FLT): Free Stock Analysis Report
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