US$237 - That's What Analysts Think WEX Inc. (NYSE:WEX) Is Worth After These Results
Investors in WEX Inc. (NYSE:WEX) had a good week, as its shares rose 2.4% to close at US$212 following the release of its full-year results. Revenues of US$2.5b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$6.16, missing estimates by 3.5%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for WEX
Taking into account the latest results, the consensus forecast from WEX's 15 analysts is for revenues of US$2.73b in 2024. This reflects a reasonable 7.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 62% to US$10.09. Before this earnings report, the analysts had been forecasting revenues of US$2.72b and earnings per share (EPS) of US$10.08 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 6.3% to US$237. It looks as though they previously had some doubts over whether the business would live up to their expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic WEX analyst has a price target of US$272 per share, while the most pessimistic values it at US$210. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the WEX's past performance and to peers in the same industry. We would highlight that WEX's revenue growth is expected to slow, with the forecast 7.2% annualised growth rate until the end of 2024 being well below the historical 11% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.7% annually. So it's pretty clear that, while WEX's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on WEX. Long-term earnings power is much more important than next year's profits. We have forecasts for WEX going out to 2026, and you can see them free on our platform here.
You can also see our analysis of WEX's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
