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Market view in daily routine: WEX Inc. (NYSE: WEX)

Oliver Rider 147 Views , 

WEX Inc. (NYSE: WEX) changed -18.95% to recent value of $109.66. The stock transacted 1083357 shares during most recent day however it has an average volume of 483.51K shares. It spotted trading -53.64% off 52-week high price. On the other end, the stock has been noted -0.32% away from the low price over the last 52-weeks.

WEX Inc. (WEX) recently stated financial results for the three months and year ended December 31, 2019.

Fourth Quarter and Full Year 2019 Financial Results

Total revenue for the fourth quarter of 2019 increased 15% to $440.0M from $381.2M for the fourth quarter of 2018. The $58.8M increase in the quarter includes an $8.7M negative impact from lower average fuel prices and foreign exchange rates. In addition, the 4th quarter includes a $20.9M reduction to properly reflect fleet section revenue and expenses.

Net income attributable to shareholders on a GAAP basis for the fourth quarter increased by $33.2M to $54.4M, or $1.24 per diluted share, contrast with $21.3M, or $0.49 per diluted share for the same period a year ago. The Company’s adjusted net income attributable to shareholders, which is a non-GAAP measure, was $114.7M for the fourth quarter of 2019, or $2.61 per diluted share, up 24% from $91.8M, or $2.11 per diluted share, for the same period last year. See Exhibit 1 for a full explanation and reconciliation of adjusted net income attributable to shareholders and adjusted net income attributable to shareholders per diluted share to the comparable GAAP measures.

For the full year 2019, revenue increased 15% to $1.72B from $1.49B in 2018. Net income attributable to shareholders on a GAAP basis was $2.26 per diluted share in 2019 contrast to $3.86 per diluted share in 2018. On a non-GAAP basis, adjusted net income per diluted share increased 11% to $9.20 from $8.28 in 2018.

“2019 was another record year for WEX, capped off by an impressive fourth quarter driven by double-digit top-line growth and strong operating leverage.” stated Melissa Smith, WEX’s Chair and Chief Executive Officer. “The fourth quarter built upon the momentum from earlier in the year, marked by robust transaction volume growth, strong performance from acquisitions, important contribution from our previous contract signings and meaningful new contract wins.”

Smith continued, “Our strong performance in 2019 is Because of WEX’s commitment to generating sustainable long-term growth, reflected in the consumer volume ramp, successful integration of Noventis, Discovery Benefits and Go Fuel Card, strong execution in our Shell and Chevron portfolios, and a great contribution from the U.S. Health business. We remain committed to providing best-in-class technologies and capabilities to our consumers and focused on driving innovation across our sections. We are well-positioned to gain additional market share in 2020 as we continue to execute against our planned pillars and create shareholder value.”

Fourth Quarter 2019 Performance Metrics

  • Average number of vehicles serviced was about 14.9M, a raise of 19% from the fourth quarter of 2018.
  • Total fuel transactions processed increased 12% from the fourth quarter of 2018 to 156.0M. Payment processing transactions increased 9% to 126.7M.
  • S. retail fuel price reduced to $2.80 per gallon from $2.94 per gallon in the fourth quarter of 2018.
  • Travel and Corporate Solutions’ purchase volume grew 17% to $9.6B from $8.2B for the fourth quarter of 2018.
  • Health and Employee Benefit Solutions’ average number of Software-as-a-Service (SaaS) accounts in the U.S. grew 17% to 13.4M from 11.5M for the fourth quarter of 2018.

Financial Guidance and Assumptions

The Company provides revenue guidance on a GAAP basis and earnings guidance on a non-GAAP basis, Because of the uncertainty and the indeterminate amount of certain elements that are included in stated GAAP earnings. This guidance does not include any impacts from the recently reported acquisition of eNett and Optal.

  • For the first quarter of 2020, WEX expects revenue in the range of $445M to $455M and adjusted net income in the range of $95M to $99M, or $2.15 to $2.25 per diluted share.
  • For the full year 2020, the Company expects revenue in the range of $1,860M to $1,900M and adjusted net income in the range of $447M to $464M, or $10.15 to $10.55 per diluted share.

First quarter and full year 2020 guidance is based on an assumed average U.S. retail fuel price of $2.69 and $2.70 per gallon, respectively. The fuel prices referenced above are based on the applicable NYMEX futures price from the week of February 3, 2020. Our guidance also assumes that fleet credit loss for the first quarter will be in the range of 15 to 20 basis points and the full year will be in the range of 13 to 18 basis points. Our guidance assumes about 44.0M shares outstanding for the full year.

WEX has a gross margin of 64.20% and an operating margin of 22.40% while its profit margin remained 5.70% for the last 12 months. Its earnings per share (EPS) expected to touch remained -41.40% for this year while earning per share for the next 5-years is expected to reach at 13.46%.  The company has 50.81M of outstanding shares and 42.97M shares were floated in the market. The price moved ahead of -41.28% from the mean of 20 days, -46.95% from mean of 50 days SMA and performed -46.27% from mean of 200 days price. Company’s performance for the week was -18.92%, -52.03% for month and YTD performance remained -47.65%.