I last wrote about WEX Inc. (NYSE: WEX ) prior to its Q2 2025 results. At that time I had issued a neutral [HOLD] rating on the stock primarily due to its subpar growth, despite the fact thatI am a value focused investor, conducting fundamental research on sectors like but not limited to chemicals, homebuilders, building materials, industrials and metals & mining. I prefer to invest in stocks which are cheaply available and have a catalyst in the near future. My investment horizon ranges from a quarter to t ...

I last wrote about WEX Inc. (NYSE: WEX ) prior to its Q2 2025 results. At that time I had issued a neutral [HOLD] rating on the stock primarily due to its subpar growth, despite the fact thatI am a value focused investor, conducting fundamental research on sectors like but not limited to chemicals, homebuilders, building materials, industrials and metals & mining. I prefer to invest in stocks which are cheaply available and have a catalyst in the near future. My investment horizon ranges from a quarter to t ...

Global commerce platform WEX has formed three new partnerships that expand its electric vehicle charging network.By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions .Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.The partnerships are with charging point operators Ly ...

Core Insights - WEX has expanded its 10-4 by WEX app network by adding Maverik — Adventure's First Stop, increasing the number of fueling stations offering instant diesel savings to over 190 locations across 21 states [1] - In celebration of National Truck Driver Appreciation Week, WEX's over-the-road business is providing a sign-on bonus of $25 off a first-time 75-gallon purchase for users of the 10-4 by WEX app [1]

Industry Overview - The Financial Transaction Services industry is part of the FinTech space, encompassing card and payment processing, ATM services, money remittance, and investment solutions [2] - The industry operates proprietary global payments networks that facilitate transactions in multiple currencies, benefiting from ongoing digitization accelerated by the pandemic [2] Key Trends - Digital payment innovations such as cryptocurrencies, biometric verification, QR code payments, and Buy Now, Pay Later (BNPL) solutions are reshaping the industry, enhancing user convenience and creating new revenue streams [3] - The rise in global trade, international travel, and remittance demand positions the industry favorably for growth, particularly for companies with advanced cross-border payment platforms [4] - Resilient consumer spending, driven by e-commerce growth and smartphone usage, is expected to sustain transaction growth, with a projected 2.3% year-over-year increase in overall consumer spending in 2025 [5] - Companies are increasingly pursuing mergers and acquisitions (M&A) and tech investments to build integrated digital ecosystems, with potential Federal Reserve rate cuts in 2025 likely to lower financing costs [6] Performance Metrics - The Zacks Financial Transaction Services industry ranks 57, placing it in the top 23% of 245 Zacks industries, indicating positive near-term prospects [8] - The industry has outperformed the Business Services sector and the S&P 500, growing 20.8% over the past year compared to 9.3% for the sector and 16.6% for the S&P 500 [10] - The industry currently trades at a forward 12-month Price/Earnings ratio of 22.24X, slightly below the S&P 500's 22.84X and the sector's 21.95X [13] Company Highlights - PayPal is recognized for its secure digital payment solutions and strategic partnerships, with a 2025 earnings estimate of $5.22 per share, reflecting a 12.3% increase year-over-year [16][17] - WEX benefits from a strong fuel network and strategic acquisitions, with a 2025 earnings estimate of $15.63 per share, indicating a 2.3% rise from the previous year [22][23] - Visa, a leader in digital payments, has a 2025 earnings estimate of $11.43 per share, showing a 13.7% increase year-over-year, supported by strong performance in key markets [25][27] - Mastercard's cross-border payments platform supports over 150 currencies, with a 2025 earnings estimate of $16.31 per share, indicating an 11.7% rise from the previous year [29][30] - Fiserv provides a comprehensive range of payment processing solutions, with a 2025 earnings estimate of $10.21 per share, reflecting a 16% increase year-over-year [33][34]

Core Viewpoint - The comparison between Wex (WEX) and Visa (V) indicates that WEX currently offers better value for investors based on various financial metrics and earnings outlook [1][3]. Valuation Metrics - WEX has a forward P/E ratio of 10.93, significantly lower than Visa's forward P/E of 30.53, suggesting WEX is more attractively priced [5]. - The PEG ratio for WEX is 1.38, while Visa's PEG ratio stands at 2.32, indicating WEX has a better balance between price and expected earnings growth [5]. - WEX's P/B ratio is 5.98 compared to Visa's 16.92, further highlighting WEX's relative undervaluation [6]. Earnings Outlook - WEX holds a Zacks Rank of 2 (Buy), reflecting a positive earnings estimate revision trend, while Visa has a Zacks Rank of 3 (Hold), indicating a less favorable outlook [3][6]. - The solid earnings outlook for WEX contributes to its superior valuation metrics compared to Visa [6].

Core Viewpoint - WEX reported strong Q2 2025 earnings, with both earnings and revenues exceeding estimates, despite some declines in specific segments [2][4][6]. Financial Performance - Adjusted earnings per share for Q2 2025 were $3.95, surpassing the Zacks Consensus Estimate by 7.1% and showing a year-over-year increase of 1.02% [2]. - Revenues for the quarter totaled $659.6 million, beating the consensus estimate by 0.9%, but reflecting a decline of 2.06% compared to the previous year [2]. Segmental Performance - The Mobility segment's revenues decreased by 3.7% year-over-year to $346.2 million, falling short of the estimate of $354.4 million [3]. - The Corporate Payments segment reported revenues of $118.3 million, down 34.2% from Q2 2024, missing the estimate of $119 million [3]. - The Benefits segment saw a significant increase in revenues, up 45.5% year-over-year to $195.1 million, exceeding the estimate of $185.5 million [3]. Operating Results - Adjusted operating income declined by 11.3% to $243 million compared to the previous year, but exceeded the estimate of $223.2 million [4]. - The adjusted operating income margin was 36.8%, surpassing the estimate of 33.9%, although it declined by 390 basis points year-over-year [4]. Balance Sheet & Cash Flow - WEX ended the quarter with cash and cash equivalents of $772.6 million, an increase from $595.8 million at the end of December 2024 [5]. - Long-term debt stood at $3.9 billion, significantly higher than $595.8 million at the end of December 2024 [5]. - The company utilized $264.6 million in cash from operating activities during the quarter, with adjusted free cash flow of $194.3 million and capital expenditures totaling $34.6 million [5]. Future Outlook - For Q3 2025, WEX expects revenues between $669 million and $689 million, with adjusted net income projected between $4.30 and $4.50 per share [6]. - For the full year 2025, revenues are anticipated to be between $2.61 billion and $2.65 billion, with adjusted net income expected between $15.37 and $15.77 per share [6]. Estimate Trends - Following the earnings release, there has been an upward trend in estimates, with the consensus estimate shifting by 5.56% [7]. Investment Scores - WEX holds an average Growth Score of C and a similar score for momentum, but has an A grade for value, placing it in the top 20% for this investment strategy [9]. - The overall aggregate VGM Score for WEX is B, indicating a favorable investment outlook [9]. General Outlook - The upward trend in estimates and the magnitude of revisions suggest a promising outlook for WEX, which currently holds a Zacks Rank 2 (Buy) [10].

Core Insights - WEX Inc. has reached a significant support level and is considered a strong stock pick from a technical perspective due to a recent "golden cross" event [1] - The "golden cross" is a bullish technical chart pattern indicating a potential breakout, formed when a stock's short-term moving average surpasses its long-term moving average [2] - WEX has shown a 6.5% increase over the past four weeks, and it holds a 1 (Strong Buy) rating on the Zacks Rank, supported by a positive earnings outlook with 8 upward revisions in estimates [4] Technical Analysis - A golden cross consists of three stages: a downtrend that bottoms out, a crossover of the shorter moving average above the longer one, and continued upward momentum [3] - This pattern is contrasted with a "death cross," which indicates potential bearish momentum [3] Earnings Outlook - WEX's positive earnings outlook for the current quarter is bolstered by multiple upward revisions in estimates, with no downward revisions in the past 60 days [4] - The Zacks Consensus Estimate for WEX has also increased, reinforcing the bullish sentiment around the stock [4] Investment Consideration - Given the technical indicators and positive earnings revisions, WEX is recommended for investors' watchlists [6]

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates on Zacks Rank and Industry Rank, access to the Zacks 1 Rank List, Equity Research reports, and Premium stock screens [1] Zacks Style Scores - Zacks Style Scores are indicators designed to help investors select stocks with the highest potential to outperform the market within 30 days, rated from A to F based on value, growth, and momentum characteristics [2] - The Value Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [3] - The Growth Score assesses a company's financial health and future outlook by analyzing projected and historical earnings, sales, and cash flow [4] - The Momentum Score identifies stocks with upward or downward trends in price or earnings outlook, utilizing one-week price changes and monthly earnings estimate changes [5] - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors seeking attractive value, growth forecasts, and promising momentum [6] Zacks Rank - The Zacks Rank is a proprietary stock-rating model that leverages earnings estimate revisions to assist investors in building successful portfolios, with 1 (Strong Buy) stocks yielding an average annual return of +23.75% since 1988, significantly outperforming the S&P 500 [7] - There are over 800 top-rated stocks available, making it essential for investors to utilize Style Scores to narrow down their choices [8] - For optimal returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B, while 3 (Hold) ranked stocks should also have A or B Scores for maximum upside potential [9] Company Spotlight: WEX Inc. - WEX Inc., based in South Portland, ME, is a prominent provider of payment processing and business solutions across various sectors, including fleet, travel, and healthcare [11] - WEX holds a Zacks Rank of 2 (Buy) and a VGM Score of B, with a Momentum Style Score of B, reflecting a 12% increase in shares over the past four weeks [11] - In the last 60 days, eight analysts have raised their earnings estimates for WEX for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.64 to $15.63 per share, and an average earnings surprise of +2.4% [12]

Group 1: Company Overview - WEX is currently rated with a Zacks Rank 2 (Buy) and an A for Value, indicating strong potential for value investors [4][3] - The stock has a P/E ratio of 10.59, significantly lower than the industry average P/E of 21.57, suggesting it may be undervalued [4] - Over the past 52 weeks, WEX's Forward P/E has fluctuated between 7.27 and 12.19, with a median of 10.13 [4] Group 2: Valuation Metrics - WEX has a PEG ratio of 1.34, which is lower than the industry average PEG of 1.79, indicating a favorable valuation considering its expected EPS growth [5] - The company’s P/B ratio stands at 6.17, compared to the industry average P/B of 8.55, further supporting its undervaluation [6] - WEX's P/S ratio is 2.31, which is slightly below the industry average P/S of 2.7, suggesting reasonable sales performance relative to its peers [7] - The P/CF ratio for WEX is 9.54, significantly lower than the industry average P/CF of 17.73, indicating strong cash flow relative to its market value [8] Group 3: Investment Outlook - The combination of these metrics suggests that WEX is likely undervalued, making it an attractive option for value investors [9] - The strength of WEX's earnings outlook positions it as one of the strongest value stocks in the market [9]