WEX - WEX: Valuation Seems Reasonable For The Quality Of The Business
2024-04-30 11:27:56 ET
Summary
- WEX is transitioning its business model to focus on B2B payments and employee benefits management, which are growing at higher rates than its core business.
- WEX's core business, which offers fleet vehicle payment solutions, is facing challenges due to the transition to electric vehicles, but the company has strategies in place to adapt.
- WEX's valuation is currently low, and the company has maintained its revenue and EPS expectations for the year, making it an interesting buying opportunity.
Investment Thesis
WEX ( WEX ) is transitioning its business model from traditional fleet management and fuel card management to B2B payments and employee benefits management. Both segments are growing at rates higher than those of the core business and will be a good mitigant for the global transition towards electric vehicles, since the current concern is that when internal combustion vehicles stop being used, fuel cards and fleet services WEX management would no longer be used. I also consider that the transition to EVs will be slower than expected, and therefore WEX will have enough time to adapt to this hypothetical new reality....
WEX: Valuation Seems Reasonable For The Quality Of The Business