Wex (WEX) Up 1.5% Since Last Earnings Report: Can It Continue?

Core Viewpoint - WEX reported strong fourth-quarter 2024 results, with earnings and revenues exceeding estimates, but both metrics showed a year-over-year decline [2][5]. Financial Performance - Adjusted earnings for Q4 2024 were $3.57 per share, beating the Zacks Consensus Estimate by 0.9%, but down 6.5% from the previous year [2]. - Revenues reached $636.5 million, surpassing estimates by 0.7%, yet declined 4% year-over-year [2]. Segment Performance - The Mobility segment generated revenues of $345.2 million, a decrease of 1.4% from the previous year, but exceeded estimates of $334.5 million due to increased investments in digital marketing [3]. - The Corporate Payments segment saw revenues drop 22.7% to $104.3 million, missing estimates of $122.8 million [3]. - The Benefits segment's revenues increased by 4.9% year-over-year to $186.9 million, surpassing estimates of $175.8 million, driven by strong SaaS account growth [4]. Operating Results - Adjusted operating income fell 6.5% to $269.8 million, exceeding estimates of $246.1 million, with an adjusted operating income margin of 42.4%, down 110 basis points year-over-year [5]. Balance Sheet & Cash Flow - WEX ended the quarter with cash and cash equivalents of $595.8 million, down from $682.6 million in the previous quarter, while long-term debt remained at $3.1 billion [6]. - The company generated $638.4 million in cash from operating activities, with adjusted free cash flow of $169.5 million and capital expenditures totaling $38.7 million [6]. Future Outlook - For Q1 2025, WEX expects revenues between $625 million and $640 million, with adjusted net income projected between $3.35 and $3.50 per share [7]. - For the full year 2025, revenues are anticipated to be between $2.60 billion and $2.66 billion, with adjusted net income expected between $14.65 and $15.25 per share [7]. Estimate Trends - There has been a downward trend in estimates, with a consensus estimate shift of -9.1% over the past month [8]. Investment Scores - WEX holds a Growth Score of B, a Momentum Score of F, and a Value Score of A, resulting in an aggregate VGM Score of B [10].