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Here's Why You Should Retain WEX Stock in Your Portfolio

WEX Inc. WEX shares have had an impressive run over the past year. The stock gained 29.7% against the 11.9% decline of the industry it belongs to and the 14.9% fall of the Zacks S&P 500 composite.

WEX Inc. Price

WEX Inc. Price
WEX Inc. Price

WEX Inc. price | WEX Inc. Quote

The company’s revenues for 2022 and 2023 are expected to increase 24.9% and 4.7% year over year, respectively. Its 2022 and 2023 earnings are expected to grow 45.7% and 3% year over year, respectively.

Factors That Augur Well

WEX’s top line continues to grow organically, driven by its extensive network of fuel and service providers, transaction volume growth, product excellence and marketing capabilities. In the third quarter of 2022, organic revenue growth was 22%.

Product and service quality and a deep understanding of customers’ operational needs have enabled the company to achieve revenue stability with the help of long-standing strategic relationships, multi-year contracts and high contract renewal rates. Revenues grew 28% in the third quarter of 2022.

WEX has been actively acquiring and investing in companies in the United States as well as internationally, to expand its product and service offerings, thereby boosting its revenue growth and enhancing scalability. The June 2021 acquisition of benefitexpress has expanded WEX’s offerings in benefits administration by bringing in a complementary suite of solutions to its Health offerings.

Some Risks

WEX’s current ratio at the end of the third quarter of 2022 was pegged at 1.12, lower than the current ratio of 1.23 reported at the end of the previous quarter. A decline in the current ratio is not desirable as it indicates that the company may have problems meeting its short-term debt obligations.

Zacks Rank and Stocks to Consider

WEX currently carries a Zacks Rank #3 (Hold).

Investors interested in the broader Zacks Business Services sector can consider some better-ranked stocks like Booz Allen Hamilton Holding Corporation BAH and Cross Country Healthcare, Inc. CCRN.

Booz Allen carries a Zacks Rank #2 (Buy) at present. BAH has a long-term earnings growth expectation of 8.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Booz Allen delivered a trailing four-quarter earnings surprise of 8.8% on average.

Cross Country Healthcare is currently a Zacks #2 Ranked stock. CCRN has a long-term earnings growth expectation of 6%.

CCRN delivered a trailing four-quarter earnings surprise of 10.1% on average.

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Booz Allen Hamilton Holding Corporation (BAH) : Free Stock Analysis Report

Cross Country Healthcare, Inc. (CCRN) : Free Stock Analysis Report

WEX Inc. (WEX) : Free Stock Analysis Report

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