Over the past six months, Corpay’s shares (currently trading at $287.78) have posted a disappointing 6.2% loss, well below the S&P 500’s 26.5% gain. This may have investors wondering how to approach the situation.
Following the drawdown, is now an opportune time to buy CPAY? Find out in our full research report, it’s free for active Edge members.
Why Do Investors Watch CPAY Stock?
Formerly known as FLEETCOR until its 2024 rebrand, Corpay (NYSE: CPAY) provides specialized payment solutions for businesses to manage vehicle expenses, corporate payments, and lodging costs with enhanced control and reporting capabilities.
Three Things to Like:
1. Long-Term Revenue Growth Shows Momentum
A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.
Over the last five years, Corpay grew its revenue at a decent 10.2% compounded annual growth rate. Its growth was slightly above the average financials company and shows its offerings resonate with customers.
2. EPS Moving Up Steadily
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Corpay’s decent 12.2% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
3. Stellar ROE Showcases Lucrative Growth Opportunities
Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for banks. Over a long period, banks with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.
Over the last five years, Corpay has averaged an ROE of 31.1%, exceptional for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows Corpay has a strong competitive moat.
Final Judgment
Corpay is an interesting business with potential. With the recent decline, the stock trades at 12.7× forward P/E (or $287.78 per share). Is now a good time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
Stocks We Like Even More Than Corpay
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