Corpay, Inc.(US:CPAY) Yahoo Finance·2025-12-05 22:00Core Thesis - Corpay, Inc. is viewed as a "compounder on sale," with expected annual per-share earnings growth of 15-20% and potential multiple expansion to 16-20x earnings [4][7] Company Overview - Corpay, Inc. (NYSE: CPAY), formerly Fleetcor, is a leading B2B payments company that has transformed from a regional fuel card business into a global B2B payments powerhouse [2] - The company has generated approximately 19% annualized shareholder returns from 2010 to 2024 [2] Financial Performance - The company has consistently delivered around 13% annual growth in revenue, EBITDA, and EPS from 2014 to 2024 [3] - As of December 1st, CPAY's share was trading at $296.27, with trailing and forward P/E ratios of 20.13 and 12.02 respectively [1] - CPAY shares are attractively priced at approximately $330, implying a 13.5x 2026E earnings, while the intrinsic value is estimated between $400 and $490, offering a 20-33% margin of safety [4] Strategic Positioning - The company is well-positioned to benefit from secular trends in digital B2B payments, inflation-sensitive revenues, and a weakening U.S. dollar, with around 50% of revenue coming from international markets [5] - Free cash flow generation and disciplined capital allocation, including $5.6 billion in buybacks from 2020 to 2024, further support the company's upside [5] Growth Opportunities - Additional growth potential arises from CPAY's cross-border business and stablecoin adoption, which could accelerate growth [6] - The company has a strong M&A track record and aligned management, which are seen as mitigants to potential risks [7] Risks and Catalysts - Key risks include the integration of the $2.4 billion Alpha Group acquisition, regulatory compliance in cross-border payments, and pressures on legacy fuel card businesses [6] - Catalysts for upside include successful execution of the business plan, accretive M&A, capital allocation, and stablecoin adoption [7]