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

It has been about a month since the last earnings report for Wex (WEX). Shares have added about 1.5% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Wex due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers. WEX Q4 Earnings Beat EstimatesWEX reported impressive fourth-quarter 2024 results, wherein earnings and revenues beat the Zacks Consensus Estimate.Quarterly adjusted earnings of $3.57 per share surpassed the Zacks Consensus Estimate by 0.9% but decreased 6.5% from the year-ago quarter. Revenues of $636.5 million beat the consensus estimate by 0.7% but declined 4% on a year-over-year basis.Segmental Revenues of WEXThe Mobility segment’s revenues decreased 1.4% from the year-ago quarter to $345.2 million and surpassed our estimate of $334.5 million. Incremental investments in sales and marketing, mainly in digital marketing, drove signings, which resulted in this segment’s revenue growth. The Corporate Payments segment’s revenues were $104.3 million, down 22.7% from the fourth quarter of 2023. They missed our estimate of $122.8 million.The Benefits segment’s revenues increased 4.9% year over year to $186.9 million, beating our estimate of $175.8 million. Strong core market dynamics that grew the SaaS accounts have fueled this segment’s revenue growth.WEX's Operating ResultsAdjusted operating income declined 6.5% to $269.8 million from the year-ago quarter and surpassed our estimate of $246.1 million. The adjusted operating income margin of 42.4% declined 110 basis points year over year, beating our projected 38.9%.Balance Sheet & Cash Flow of WEXWEX exited the quarter with cash and cash equivalents of $595.8 million compared with $682.6 million at the end of the preceding quarter. The long-term debt was $3.1 billion, flat with the previous quarter.The company generated $638.4 million in cash from operating activities in the quarter. The adjusted free cash flow was $169.5 million. Capital expenditure totaled $38.7 million.WEX's Q1 & 2025 OutlookFor the first quarter of 2025, WEX anticipates revenues in the range of $625-$640 million. Adjusted net income is expected between $3.35 and $3.50 per share.For 2025, revenues are expected to be between $2.60 billion and $2.66 billion. Adjusted net income is now expected to be between $14.65 and $15.25 per share.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in estimates revision.The consensus estimate has shifted -9.1% due to these changes.VGM ScoresCurrently, Wex has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Wex has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report WEX Inc. (WEX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks