In the latest trading session, Wex (WEX) closed at $152.82, marking a -1% move from the previous day. This change lagged the S&P 500's daily loss of 0.94%. At the same time, the Dow added 0.04%, and the tech-heavy Nasdaq lost 2.13%.
Prior to today's trading, shares of the provider of fuel payment processing for fleet vehicles had gained 0.84% over the past month. This has outpaced the Business Services sector's loss of 1.13% and the S&P 500's gain of 0.02% in that time.
Investors will be hoping for strength from WEX as it approaches its next earnings release. The company is expected to report EPS of $1.42, down 37.72% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $351.19 million, down 20.51% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $7.15 per share and revenue of $1.56 billion, which would represent changes of -22.28% and -9.56%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for WEX. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.2% higher. WEX is holding a Zacks Rank of #3 (Hold) right now.
Valuation is also important, so investors should note that WEX has a Forward P/E ratio of 21.6 right now. For comparison, its industry has an average Forward P/E of 26.35, which means WEX is trading at a discount to the group.
It is also worth noting that WEX currently has a PEG ratio of 1.44. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Financial Transaction Services industry currently had an average PEG ratio of 1.84 as of yesterday's close.
The Financial Transaction Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 41, putting it in the top 17% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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