WEX Inc. common stock (WEX)

FairStock Score: 61/100 — STEADY

Key Financials

Strengths

• Generates $1.1 billion in annual free cash flow (21.2% yield on market cap)
• High return on equity of 22.3% demonstrating efficient capital deployment

Concerns

• Trades significantly above Graham Number ($83) with negative 83% margin of safety—limited downside protection
• High leverage at 3.99x debt-to-equity increases financial risk and interest expense burden
• Altman Z-Score of 0.6 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

WEX Inc. common stock is a small-cap technology company valued at $5.2 billion. The business generates $2.7 billion in annual revenue with a 2.9% net margin and $1.1 billion in free cash flow. From a quality standpoint, WEX shows distressed Altman Z-Score of 0.6 warrants caution and strong 22% ROE. On valuation, the stock is reasonably priced at 18.3x earnings, with trades above its Graham Number with a negative 83% margin. Growth dynamics show revenue growing at 5.7% and profit growth of 31.9%. Our composite FairStock Score of 61/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $1.1 billion in annual free cash flow (21.2% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Elevated leverage at 4.0x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer