WEX Inc. Reaches 52-Week High on Strong Q2, Good Tidings - Analyst Blog


On Aug 21, 2014, WEX Inc. ( WEX ) scaled a 52-week high of $115.63 after posting strong second-quarter financial results, which included a 9.9% positive earnings surprise. With respect to earnings trends, this financial transaction services provider has delivered positive earnings surprises in three of the last four quarters with an average beat of 5.03%.

In fact, shares of WEX rose nearly 4.9% over the last few trading sessions to close at $115.48, since the company reported second-quarter earnings results on Jul 30, 2014. Furthermore, the one-year return on the stock is 35.78%, above the S&P 500's return of 20.32% as well as that of other players in the financial services space like Visa Inc. ( V ) and MasterCard Incorporated ( MA ) that generated returns of 24.62% and 24.53%, respectively, over the same period.

During the second quarter, the company's bottom line not only surpassed the Zacks Consensus Estimate but also improved year over year on strategic investments. Moreover, the top line exceeded the Zacks Consensus Estimate and grew year over year as well. The company's organic growth was impressive during the quarter. Also, the mergers and acquisition (M&A) activities and global expansion strategies helped the company deliver strong second-quarter results.

The notable measures by WEX over the past couple of months that also contributed to the 52-week high include extension of the Fuel Price Risks Management Program and program extensions with Phillips 66 ( PSX ) and ExxonMobil ( XOM ). Moreover, WEX Fleet One got selected by Sinclar Oil to be its Commercial Fleet Fueling Card Partner. Additionally, the contract with Shell to become the prepaid fuel card processor for the latter and an international agreement with Conferma (a veteran in providing Virtual Card Number technology) helped WEX to hit the 52-week high.  

Banking on the strong results in the first half of 2014 and including synergies from the acquisitions, management of WEX raised its 2014 revenue guidance to $813-$823 million from $767-$787 million and the adjusted net income guidance to $4.84-$4.99 per share from $4.75-$4.95. However, the Zacks Consensus Estimate for full-year 2014 stands lower than the guidance at $4.74, translating into a year-over-year improvement of 6.63%.

Currently, WEX carries a Zacks Rank #2 (Buy). Other better-ranked stocks in the financial transaction services space include Vantiv, Inc. ( VNTV ), which sports a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: VNTV , WEX , MA , V , XOM



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