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Why Is FleetCor Technologies (FLT) Up 2% Since Last Earnings Report?

A month has gone by since the last earnings report for FleetCor Technologies (FLT). Shares have added about 2% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is FleetCor Technologies due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

FLEETCOR Surpasses Q1 Earnings & Revenues Estimates

FLEETCOR reported impressive first-quarter 2023 results wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate. 

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Adjusted earnings (excluding 92 cents from non-recurring items) of $3.8 per share outpaced the Zacks Consensus Estimate by 3% and our estimate by 3.3%. Earnings grew 4.1% year over year.

Revenues of $901.3 million beat the Zacks Consensus Estimate and our estimate by 2.3% and increased 14.2% year over year on a reported basis and 12% on an organic basis.

Revenues in Detail

Product-category-wise, fleet revenues of $372.7 million rose 6% year over year on a reported basis and 3% on an organic basis.  The Corporate Payments segment’s revenues of $227.2 million increased 16% year over year on a reported basis and 19% on an organic basis.

Brazil segment’s revenues of $121.7 million improved 19% year over year on a reported basis and 18% on an organic basis. The Lodging segment’s revenues of $122.3 million grew 29% year over year on a reported basis and 26% on an organic basis. The Other segment’s revenues of $57.3 million increased 1% year over year on a reported and surged 2% on an organic basis.

Operating Results

Operating income increased 18% from the prior-year quarter’s level to $375.2 million. The operating income margin fell 130 basis points to 41.6%, compared with the prior-year quarter.

Balance Sheet & Cash Flow

FLEETCOR exited first-quarter 2023 with cash, cash equivalents and restricted cash of $1.27 billion, compared with $1.44 billion at the end of the prior quarter.

FLT provided $327.7 million in net cash from operating activities. Capital expenditures totaled $36.7 million.

Q2 Guidance

Revenues are expected to be between $930 million and $950 million. The midpoint ($940 million) of the guided range is below the Zacks Consensus Estimate of $946.3 million.

Adjusted earnings per share is expected to be between $4.02 and $4.22. The Zacks Consensus Estimate of $4.23 per share is pegged above the guided range.

Updated 2023 Guidance

Adjusted earnings per share are still anticipated between $16.95 and $17.35. Revenues are now anticipated between $3.82 billion and $3.86 billion.Interest expenses are now expected between $310 million and $330 million. The tax rate is expected to be approximately between 26% and 27%. Weighted average fuel prices are expected to be around $3.99 per gallon in US.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

VGM Scores

Currently, FleetCor Technologies has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. 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. Notably, FleetCor Technologies has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

FleetCor Technologies is part of the Zacks Financial Transaction Services industry. Over the past month, Fidelity National Information Services (FIS), a stock from the same industry, has gained 3.3%. The company reported its results for the quarter ended March 2023 more than a month ago.

Fidelity National reported revenues of $3.51 billion in the last reported quarter, representing a year-over-year change of +0.5%. EPS of $1.29 for the same period compares with $1.47 a year ago.

Fidelity National is expected to post earnings of $1.48 per share for the current quarter, representing a year-over-year change of -14.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.1%.

Fidelity National 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

FleetCor Technologies, Inc. (FLT) : Free Stock Analysis Report

Fidelity National Information Services, Inc. (FIS) : Free Stock Analysis Report

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