On Mar 24, Zacks Investment Research upgraded FleetCor Technologies, Inc. FLT to a Zacks Rank #3 (Hold).
Why the Upgrade?
FleetCor delivered solid fourth-quarter results with operating net earnings surpassing the Zacks Consensus Estimate by 0.77% and improving 36.5% year over year. The upbeat performance came on the back of strong organic growth in the U.S. and the favorable impact of acquisitions.
With respect to earnings performance, the company delivered four straight quarters of positive surprise with an average beat of 1.5%.
Contribution of about 29% from the Comdata acquisition as well as higher revenues at the North America segment helped the top line surpass the Zacks Consensus Estimate by 17.3%, also improving 47.3% year over year. The company estimates Comdata to contribute substantially in 2015 as well, and expects earnings from the segment to grow about 20% from last year’s level.
In spite of climbing expenses, a stronger top line aided adjusted earnings before interest, tax, depreciation and amortization to rise 61.6% year over year in the quarter.
Better performance at both the North America and International segments drove an upsurge of 321% in transaction volumes.
FleetCor exited 2014 with a solid liquidity cushion with cash and cash equivalents improving 41% from the 2013 level. Cash from operations soared 61% year over year.
FleetCor Technologies expects to generate total revenue of $1.60–$1.65 billion in 2015. Adjusted net income is expected in the range of $560–$580 million and adjusted net income per diluted share in the range of $5.95–$6.15.
The Zacks Consensus Estimate is currently pegged at $6.11 for 2015 and $7.29 for 2016. These translate to year-over-year increases of 19.1% and 20.9% respectively. The expected long-term earnings growth is currently pegged at 17.6%
Other Stocks to Consider
Better-ranked miscellaneous financial service providers include Global Cash Access Holdings, Inc. GCA, Apollo Residential Mortgage, Inc. AMTG and General Finance Corporation GFN. While Global Cash Access sports a Zacks Rank #1 (Strong Buy), Apollo Residential Mortgage and General Finance carry a Zack Rank #2 (Buy).
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