As of 30th Sept 2020
Exec Summary (<50 words)
Traditional fuel card provider that's aggressively expanding to capture B2B payments opportunity in Travel & Health sector. Payment rails expertise, strong differentiated distribution, margin improvement over time are key levers of the investment thesis.
Founded: 1983
Employees: 5000
MarketCap (9/30/20): $6.2B
3yr Return: 7%
5 yr Return: 9%
5Yr Rev growth: 16%
5Yr Inc growth: -13%
Web: www.wexinc.com
B2B payments provider platform that started as a fuel card provider to fleet operators (large and small) and has expanded into Travel/Health segment since then.
All three segments (Travel, Health, Fuel) are attractive, vertical-specific markets defined by large, fragmented, and underpenetrated TAMs; along with high complexity.
Typically criticized for exposure to fuel price volatility given fuel cards are majority revenue (60%), the company has been constantly de-linking its revenue volatility with fuel prices, which today stands at ~25%.
Largest competitor is FleetCor (fuel cards provider)
Wex being a B2B payments player mainly gains share by people switching from cash/ACH payments to industry-tailored B2B products.