Yahoo Finance Why Is Corpay (CPAY) Down 7.7% Since Last Earnings Report?
A month has gone by since the last earnings report for Corpay (CPAY). Shares have lost about 7.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Corpay due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Corpay Q1 Earnings Beat Estimates
Corpay reported mixed first-quarter 2024 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
CPAY’s earnings per share of $4.1 beat the consensus estimate by a slight margin and increased 7.9% from the year-ago quarter. However, the total revenues of $935.25 million missed the consensus estimate by a slight margin but rose 3.8% year over year.
Segmental Results
Vehicle payments’ revenues of $494.1 billion decreased marginally from the year-ago quarter. This figure missed our anticipation of $514.6 million. The decline was caused by the soft economy of the U.K., which impacted volumes in specific industry sectors.
Revenues from Corporate payments amounted to $265.4 million, up 17% year over year, surpassing our estimate of $244.8 million. Solid growth across spends volume transactions and customers resulted in the surge of this segment’s revenues.
Lodging payments reported revenues of $111.3 million, declining 9% from the year-ago quarter. The reported figure lagged our estimate of $129.3 million. The downfall was caused by macro weakness, along with issues in converting to a new IT system.
Margins
EBITDA rose 5% from the year-ago quarter to $482.4 million, beating our estimated $468.8 million. The EBITDA margin of 51.6% grew 60 basis points from the first quarter of 2023, surpassing our expectation of 50.1%.
Balance Sheet & Cash Flow
CPAY exited first-quarter 2024 with cash and cash equivalents of $1.3 billion compared with $1.4 billion in fourth-quarter 2023. The long-term debt of $4.9 billion compares with $4.6 billion in the preceding quarter. Corpay generated $350.2 million in cash from operating activities in the quarter. Capital expenditure amounted to $41.2 million.
2024 Outlook
CPAY lowered the guidance for 2024, wherein it expects revenues of $3.96-$4.04 billion compared with $4.04-$4.12 billion stated previously. Adjusted net income per diluted share is expected to be s$18.80-$19.20 compared with $19.20-$19.60 previously.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -5.25% due to these changes.
VGM Scores
At this time, Corpay has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Corpay has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Corpay is part of the Zacks Financial Transaction Services industry. Over the past month, Bread Financial Holdings (BFH), a stock from the same industry, has gained 2.1%. The company reported its results for the quarter ended March 2024 more than a month ago.
Bread Financial reported revenues of $991 million in the last reported quarter, representing a year-over-year change of -23.1%. EPS of $2.73 for the same period compares with $9.08 a year ago.
Bread Financial is expected to post earnings of $1.45 per share for the current quarter, representing a year-over-year change of +14.2%. Over the last 30 days, the Zacks Consensus Estimate has changed +10.9%.
Bread Financial has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Corpay, Inc. (CPAY) : Free Stock Analysis Report
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