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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Wex Inc. (XNYS:WEX) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
WEX
Name:
WEX INC. (XNYS:WEX)
Sector:
- 185193.00K
Industry:
Software�Infrastructure
CEO:
Ms. Melissa Smith
Total Employees:
5,600
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -125.79% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF WEX INC.(WEX) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�INFRASTRUCTURE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
152.25
One Month Price Target:
$153.57
Six Month Price Target :
$160.17
Likely Price in One Year's Time:
Ticker:
$168.08
Likely Trading Range Today Under (Normal Volatility)
$151.37
Price Upper limit ($) :
$153.21
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$141.18
This week:
$127.49
This month :
$102.73
Other Primary facts
Market Cap:
6.73B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
44.17M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
24.81%
-22.79%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$203.65
$180.20
$100.85
$124.30
Medium risk (<10%) entry points
Buy Call
Sell Call
$172.56
Buy Put:
Sell Put:
$167.56
$131.87
$136.94
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
WEX
Sharpe Ratio:
0.48%
Comparison:
WEX, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -70.62% lower than the industry
& is -78.92% lower than the market/S&P 500 average
Average Returns/Yield of
WEX
Daily returns:
0.03%
Weekly returns:
0.13%
Monthly returns:
0.52%
Yearly returns:
14.38%
Comparison of returns:
Average annual returns/yield (last 3 years) is -56.75% below industry average
Classification:
WEX, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.7
Statistical test of Returns:
WEX has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.55%
Weekly Volatility:
7.95%
Monthly Volatility:
15.89%
Yearly Volatility:
55.05%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.89%
Volatility in last five trading days has been -75.09% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.27%
Weekly VaR:
-16.26%
Monthly VaR:
-32.52%
How Much Can the price of
WEX
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-28%
Worst case (decline):
>85%
This translates to price declining to:
$108.91
This translates to price declining to:
$22.84
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
WEX is a 129.55% riskier investment compared to the market/S&P 500 & is 96.65% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 6.66% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
WEX
Beta in relation to market/S&P 500--1.55
Expected beta in 1 year's time:
0.989
Expected beta in 3 year's time:
1.399
Unlevered (debt free) Beta:
0.803
Beta in relation to Nasdaq (XNAS):
1.136
Beta in relation to all global stocks::
1.251
Beta Comparison & Analysis
Beta of competitors/peers::
1.529
Beta is 1.25% higher than peers
Average Industry Beta:
1.112
Beta is 39.21% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
3.41%
Sustainable growth rate is -99.08% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.075
Alpha is -308.17% below industry average alpha yield
Alpha is -479% below the market average
Analysis of Cost of Capital of
WEX
Equity cost of capital:
0.138
Equity cost of capital is 27.74% above industry mean WACC
Unlevered (without debt) cost of capital:
7.14%
Before-tax cost of debt:
4.26%
After-tax cost of debt:
3.36%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.36%
WACC is 46.85% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$44.31
Revenue growth rate per share of (3Y):
3.49
Annual revenue growth rate is -69.78% below industry average
EPS:
$2.77
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$2.61
-
-
Debt per share
$62.79
EBITDA per share
$14.35
Valuation Analysis Today of
WEX
P/E Ratio:
35.55
P/E Ratio of Competitors/Peers:
23.67
P/E ratio is 50.19% higher than main peers & is -45.51% lower than the industry
Stock price/value with industry average P/E ratio: $180.70
WEX is -15.75% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
3.44
Price to sales ratio is -68.71% below the industry mean
P/B (Price to book value ratio):
3.49
Price to free cash flow: 58.45
-
Net income growth rate (3Y):
-99.92%
Net income growth rate is -101.18% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
143.98%
Net debt to equity ratio:
122.18%
Debt to assets ratio:
24.47%
Net debt to assets ratio:
20.77%
Debt-to-asset ratio is -64.90% below industry average
Ability to repay debt:
Interest coverage ratio:
5.08
Interest coverage ratio is -102.41% less than industry average
Looking forward:
Debt growth rate:
-5.81%
Annual debt growth is -105% lower than industry average debt growth rate
Debt repayment rate in last quarter: 16.30%
Analysis of Key Statistics
Correlation of price movement with the market:
0.697
Statistical significance of correlation:
WEX has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.48
Stock price is 45.34% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.48
Correlation of price movement with Nasdaq (^IXIC):
0.014
Covariance of price movement with the market:
0.03
Kurtosis
10.977
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.108
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
WEX
Gross Profit Margin Ratio:
248%
Operating Profit Margin Ratio:
21.14%
Operating profit margin is -278.10% lower than the industry
Net Profit Margin Ratio:
248%
Effective Tax Rate:
35.60%
Effective tax rate is 13.64% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
6.51%
Return on equity (ROE) is -93.90% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
1.11%
Return on assets (ROA) is -129.23% lower than the industry
Financial Leverage:
1.3x
Current Ratio:
1.21
Current ratio is -48.18% below industry average
Cash Conversion Cycle (days):
39
Cash conversion cycle is -65.35% below industry average
The remaining useful life of property plant & equipment is: 0.6 years
Stock based compensation to net income ratio:
18.88%
In-depth Efficiency Analysis
Revenue generated per employee:
349.5K
Each employee generates -11% less revenue than industry average revenue per employee
EBITDA generated per employee:
113.2K
Each employee generates 73% more EBITDA than industry average revenue per employee
Profit generated per employee:
22.4K
Each employee generates 7% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 33.1K
Each employee generates -267% less free cash flow than industry average revenue per employee
Assets/Capital per employee
892.1K
Each employee generates -267% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
WEX
DXC TECHNOLOGY COMPANY (XNYS:DXC)
Globant SA (XNYS:GLOB)
GENPACT LIMITED (XNYS:G)
JUNIPER NETWORKS, INC. (XNYS:JNPR)
CIENA CORPORATION (XNYS:CIEN)
Iprochim SA (XBSE:IPHI)
GUIDEWIRE SOFTWARE, INC. (XNYS:GWRE)
Lightspeed Commerce Inc. (XNYS:LSPD)
SENSATA TECHNOLOGIES HOLDING PLC (XNYS:ST)
Current Analyst Ratings
Strong buy�13%
Buy�29%
Hold�25%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.96B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
746.52M
1.21B
-
319.11M
633.79M
314.68M
163.28M
797.06M
-
124.83M
272.25M
634.05M
413.73M
125.47M
313.23M
111.51M
125.47M
Statement of Cash Flow
Date:
Period:
66.46M
Differed Income Tax :
14.20M
Stock Based Compensation :
23.68M
Change in Working Capital :
- 346769.00K
Accounts Receivables:
-
Other Working Capital:
24.78M
Other Non-Cash Items:
- 7385.00K
Net Cash Provided by Operating Activities:
- 161030.00K
Investments in PP&E:
- 24163.00K
Net Acquisitions:
-
Purchases of Investments:
- 97684.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
577.54M
977.76M
1.56B
3.86B
-
919.29M
6.34B
177.77M
2.92B
1.60B
38.21M
6.60M
257.11M
5.00B
-
11.33B
1.71B
157.62M
-
-
3.38B
5.25B
2.77B
1.17B
4.15B
-
9.41B
494.00K
1.41B
- 169879.0K
-
March 31, 2022 at 6:00:00 AM
1.54B
1.93B
11.33B
1.02B
2.93B
2.4B
15.28M
-
- 106563.00K
- 540335.00K
-
-
-
802.85M
262.52M
- 2418.00K
- 7494.00K
1.25B
1.26B
- 161030.00K
- 24163.00K
- 185193.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
WEX
2023
2024
2025
2026
2027
$146.06
$161.25
$178.02
$196.54
$216.98