Intrinsic value of WEX - WEX

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$104.80

  Intrinsic Value

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  Value-price divergence*

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$104.80

 
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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of WEX stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 4.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  19.06
  36.60
  33.44
  30.60
  28.04
  25.73
  23.66
  21.79
  20.11
  18.60
  17.24
  16.02
  14.92
  13.92
  13.03
  12.23
  11.51
  10.86
  10.27
  9.74
  9.27
  8.84
  8.46
  8.11
  7.80
  7.52
  7.27
  7.04
  6.84
  6.65
  6.49
Revenue, $m
  1,018
  1,391
  1,856
  2,423
  3,103
  3,901
  4,824
  5,876
  7,057
  8,370
  9,813
  11,385
  13,084
  14,906
  16,848
  18,908
  21,084
  23,373
  25,773
  28,284
  30,906
  33,639
  36,484
  39,443
  42,520
  45,718
  49,041
  52,494
  56,083
  59,815
  63,696
Variable operating expenses, $m
 
  951
  1,207
  1,520
  1,895
  2,335
  2,844
  3,424
  4,076
  4,800
  5,595
  6,278
  7,215
  8,220
  9,291
  10,427
  11,627
  12,889
  14,213
  15,597
  17,043
  18,550
  20,119
  21,751
  23,448
  25,211
  27,044
  28,948
  30,927
  32,985
  35,125
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  823
  951
  1,207
  1,520
  1,895
  2,335
  2,844
  3,424
  4,076
  4,800
  5,595
  6,278
  7,215
  8,220
  9,291
  10,427
  11,627
  12,889
  14,213
  15,597
  17,043
  18,550
  20,119
  21,751
  23,448
  25,211
  27,044
  28,948
  30,927
  32,985
  35,125
Operating income, $m
  195
  440
  649
  903
  1,208
  1,566
  1,980
  2,452
  2,982
  3,571
  4,218
  5,107
  5,869
  6,686
  7,557
  8,481
  9,457
  10,484
  11,561
  12,687
  13,863
  15,089
  16,365
  17,692
  19,072
  20,507
  21,997
  23,546
  25,156
  26,830
  28,571
EBITDA, $m
  337
  667
  890
  1,163
  1,489
  1,872
  2,315
  2,819
  3,386
  4,016
  4,708
  5,463
  6,277
  7,152
  8,084
  9,072
  10,116
  11,214
  12,366
  13,571
  14,829
  16,140
  17,505
  18,925
  20,401
  21,935
  23,530
  25,186
  26,909
  28,699
  30,561
Interest expense (income), $m
  116
  74
  132
  204
  291
  396
  520
  662
  825
  1,008
  1,211
  1,434
  1,677
  1,939
  2,221
  2,521
  2,839
  3,176
  3,529
  3,900
  4,289
  4,694
  5,116
  5,556
  6,013
  6,489
  6,983
  7,497
  8,031
  8,585
  9,162
Earnings before tax, $m
  87
  366
  517
  700
  917
  1,170
  1,460
  1,789
  2,157
  2,563
  3,008
  3,673
  4,192
  4,747
  5,337
  5,960
  6,618
  7,308
  8,031
  8,787
  9,574
  10,395
  11,249
  12,136
  13,059
  14,018
  15,014
  16,049
  17,126
  18,245
  19,409
Tax expense, $m
  30
  99
  140
  189
  247
  316
  394
  483
  582
  692
  812
  992
  1,132
  1,282
  1,441
  1,609
  1,787
  1,973
  2,168
  2,372
  2,585
  2,807
  3,037
  3,277
  3,526
  3,785
  4,054
  4,333
  4,624
  4,926
  5,240
Net income, $m
  61
  267
  377
  511
  669
  854
  1,066
  1,306
  1,574
  1,871
  2,195
  2,682
  3,060
  3,465
  3,896
  4,351
  4,831
  5,335
  5,863
  6,414
  6,989
  7,588
  8,211
  8,860
  9,533
  10,233
  10,960
  11,716
  12,502
  13,319
  14,168

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  191
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  5,997
  8,038
  10,726
  14,008
  17,935
  22,550
  27,885
  33,963
  40,794
  48,383
  56,725
  65,812
  75,628
  86,159
  97,388
  109,298
  121,873
  135,104
  148,979
  163,494
  178,647
  194,443
  210,888
  227,995
  245,780
  264,265
  283,473
  303,434
  324,182
  345,752
  368,186
Adjusted assets (=assets-cash), $m
  5,806
  8,038
  10,726
  14,008
  17,935
  22,550
  27,885
  33,963
  40,794
  48,383
  56,725
  65,812
  75,628
  86,159
  97,388
  109,298
  121,873
  135,104
  148,979
  163,494
  178,647
  194,443
  210,888
  227,995
  245,780
  264,265
  283,473
  303,434
  324,182
  345,752
  368,186
Revenue / Adjusted assets
  0.175
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
  0.173
Average production assets, $m
  1,022
  1,186
  1,583
  2,067
  2,647
  3,328
  4,115
  5,012
  6,020
  7,140
  8,371
  9,712
  11,160
  12,714
  14,371
  16,129
  17,985
  19,937
  21,985
  24,127
  26,363
  28,694
  31,121
  33,645
  36,270
  38,997
  41,832
  44,777
  47,839
  51,022
  54,333
Working capital, $m
  0
  -146
  -195
  -254
  -326
  -410
  -507
  -617
  -741
  -879
  -1,030
  -1,195
  -1,374
  -1,565
  -1,769
  -1,985
  -2,214
  -2,454
  -2,706
  -2,970
  -3,245
  -3,532
  -3,831
  -4,142
  -4,465
  -4,800
  -5,149
  -5,512
  -5,889
  -6,281
  -6,688
Total debt, $m
  2,205
  3,763
  5,817
  8,324
  11,324
  14,850
  18,926
  23,569
  28,789
  34,586
  40,960
  47,902
  55,402
  63,448
  72,026
  81,125
  90,733
  100,841
  111,442
  122,531
  134,109
  146,176
  158,741
  171,810
  185,398
  199,520
  214,195
  229,446
  245,297
  261,777
  278,916
Total liabilities, $m
  4,500
  6,141
  8,195
  10,702
  13,702
  17,228
  21,304
  25,947
  31,167
  36,964
  43,338
  50,280
  57,780
  65,826
  74,404
  83,503
  93,111
  103,219
  113,820
  124,909
  136,487
  148,554
  161,119
  174,188
  187,776
  201,898
  216,573
  231,824
  247,675
  264,155
  281,294
Total equity, $m
  1,497
  1,897
  2,531
  3,306
  4,233
  5,322
  6,581
  8,015
  9,627
  11,418
  13,387
  15,532
  17,848
  20,334
  22,984
  25,794
  28,762
  31,884
  35,159
  38,584
  42,161
  45,889
  49,770
  53,807
  58,004
  62,366
  66,900
  71,610
  76,507
  81,597
  86,892
Total liabilities and equity, $m
  5,997
  8,038
  10,726
  14,008
  17,935
  22,550
  27,885
  33,962
  40,794
  48,382
  56,725
  65,812
  75,628
  86,160
  97,388
  109,297
  121,873
  135,103
  148,979
  163,493
  178,648
  194,443
  210,889
  227,995
  245,780
  264,264
  283,473
  303,434
  324,182
  345,752
  368,186
Debt-to-equity ratio
  1.473
  1.980
  2.300
  2.520
  2.680
  2.790
  2.880
  2.940
  2.990
  3.030
  3.060
  3.080
  3.100
  3.120
  3.130
  3.150
  3.150
  3.160
  3.170
  3.180
  3.180
  3.190
  3.190
  3.190
  3.200
  3.200
  3.200
  3.200
  3.210
  3.210
  3.210
Adjusted equity ratio
  0.225
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  61
  267
  377
  511
  669
  854
  1,066
  1,306
  1,574
  1,871
  2,195
  2,682
  3,060
  3,465
  3,896
  4,351
  4,831
  5,335
  5,863
  6,414
  6,989
  7,588
  8,211
  8,860
  9,533
  10,233
  10,960
  11,716
  12,502
  13,319
  14,168
Depreciation, amort., depletion, $m
  142
  227
  242
  260
  281
  306
  335
  367
  404
  445
  490
  356
  409
  466
  526
  591
  659
  730
  805
  884
  966
  1,051
  1,140
  1,232
  1,329
  1,428
  1,532
  1,640
  1,752
  1,869
  1,990
Funds from operations, $m
  -593
  494
  619
  770
  950
  1,160
  1,401
  1,674
  1,979
  2,316
  2,686
  3,037
  3,469
  3,931
  4,422
  4,942
  5,490
  6,065
  6,668
  7,298
  7,955
  8,639
  9,351
  10,092
  10,862
  11,661
  12,493
  13,356
  14,254
  15,188
  16,159
Change in working capital, $m
  -442
  -39
  -49
  -60
  -71
  -84
  -97
  -110
  -124
  -138
  -152
  -165
  -178
  -191
  -204
  -216
  -228
  -240
  -252
  -264
  -275
  -287
  -299
  -311
  -323
  -336
  -349
  -363
  -377
  -392
  -408
Cash from operations, $m
  -151
  930
  668
  830
  1,021
  1,243
  1,497
  1,784
  2,103
  2,454
  2,837
  3,202
  3,647
  4,122
  4,626
  5,158
  5,718
  6,306
  6,920
  7,562
  8,230
  8,926
  9,650
  10,403
  11,185
  11,997
  12,841
  13,719
  14,631
  15,579
  16,566
Maintenance CAPEX, $m
  0
  -32
  -43
  -58
  -76
  -97
  -122
  -151
  -184
  -221
  -262
  -307
  -356
  -409
  -466
  -526
  -591
  -659
  -730
  -805
  -884
  -966
  -1,051
  -1,140
  -1,232
  -1,329
  -1,428
  -1,532
  -1,640
  -1,752
  -1,869
New CAPEX, $m
  -66
  -318
  -397
  -484
  -580
  -681
  -787
  -897
  -1,008
  -1,120
  -1,231
  -1,341
  -1,449
  -1,554
  -1,657
  -1,757
  -1,856
  -1,952
  -2,048
  -2,142
  -2,236
  -2,331
  -2,427
  -2,524
  -2,625
  -2,728
  -2,835
  -2,946
  -3,062
  -3,183
  -3,311
Cash from investing activities, $m
  -1,160
  -350
  -440
  -542
  -656
  -778
  -909
  -1,048
  -1,192
  -1,341
  -1,493
  -1,648
  -1,805
  -1,963
  -2,123
  -2,283
  -2,447
  -2,611
  -2,778
  -2,947
  -3,120
  -3,297
  -3,478
  -3,664
  -3,857
  -4,057
  -4,263
  -4,478
  -4,702
  -4,935
  -5,180
Free cash flow, $m
  -1,311
  580
  228
  288
  366
  465
  588
  736
  911
  1,114
  1,345
  1,555
  1,843
  2,159
  2,503
  2,874
  3,272
  3,695
  4,142
  4,614
  5,110
  5,630
  6,172
  6,738
  7,328
  7,941
  8,578
  9,241
  9,929
  10,644
  11,387
Issuance/(repayment) of debt, $m
  969
  1,642
  2,054
  2,507
  3,000
  3,526
  4,076
  4,643
  5,219
  5,798
  6,374
  6,942
  7,500
  8,046
  8,579
  9,099
  9,608
  10,108
  10,601
  11,089
  11,577
  12,068
  12,564
  13,070
  13,588
  14,122
  14,675
  15,250
  15,851
  16,480
  17,139
Issuance/(repurchase) of shares, $m
  -2
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,216
  1,642
  2,054
  2,507
  3,000
  3,526
  4,076
  4,643
  5,219
  5,798
  6,374
  6,942
  7,500
  8,046
  8,579
  9,099
  9,608
  10,108
  10,601
  11,089
  11,577
  12,068
  12,564
  13,070
  13,588
  14,122
  14,675
  15,250
  15,851
  16,480
  17,139
Total cash flow (excl. dividends), $m
  -89
  2,222
  2,281
  2,795
  3,366
  3,991
  4,664
  5,379
  6,130
  6,912
  7,718
  8,497
  9,343
  10,205
  11,082
  11,973
  12,880
  13,802
  14,743
  15,704
  16,688
  17,697
  18,736
  19,808
  20,916
  22,063
  23,254
  24,491
  25,780
  27,124
  28,526
Retained Cash Flow (-), $m
  -414
  -507
  -634
  -774
  -927
  -1,089
  -1,259
  -1,434
  -1,612
  -1,791
  -1,969
  -2,144
  -2,317
  -2,485
  -2,650
  -2,811
  -2,968
  -3,122
  -3,275
  -3,426
  -3,576
  -3,728
  -3,881
  -4,037
  -4,197
  -4,362
  -4,533
  -4,711
  -4,896
  -5,091
  -5,294
Prev. year cash balance distribution, $m
 
  107
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,822
  1,647
  2,020
  2,440
  2,902
  3,405
  3,945
  4,518
  5,121
  5,750
  6,352
  7,026
  7,720
  8,432
  9,163
  9,912
  10,680
  11,468
  12,278
  13,111
  13,970
  14,855
  15,771
  16,718
  17,701
  18,720
  19,780
  20,884
  22,033
  23,232
Discount rate, %
 
  8.90
  9.35
  9.81
  10.30
  10.82
  11.36
  11.93
  12.52
  13.15
  13.81
  14.50
  15.22
  15.98
  16.78
  17.62
  18.50
  19.43
  20.40
  21.42
  22.49
  23.61
  24.80
  26.03
  27.34
  28.70
  30.14
  31.65
  33.23
  34.89
  36.63
PV of cash for distribution, $m
 
  1,674
  1,378
  1,526
  1,648
  1,737
  1,786
  1,793
  1,758
  1,684
  1,577
  1,433
  1,283
  1,123
  961
  803
  655
  522
  406
  307
  227
  163
  114
  77
  51
  32
  20
  12
  7
  4
  2
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

WEX Inc. provides corporate card payment solutions in North and South America, the Asia Pacific, and Europe. The company’s Fleet Payment Solutions segment offers fleet vehicle payment and transaction processing services. Its services include customer, account activation, and account retention services; authorization and billing inquiries, and account maintenance services; premium fleet services; credit and collections services; and merchant services. This segment markets its products directly to commercial and government vehicle fleet customers with small, medium, and large fleets, as well as with over-the-road and long haul fleets; and indirectly through co-branded and private label relationships. Its Travel and Corporate Solutions segment provides payment processing solutions for corporate payment and transaction monitoring needs. Its products include virtual cards that are used for transactions that require pre-authorization and where no card is presented; and prepaid and gift card products enables secure payment and financial management solutions with single card options, access to open or closed loop redemption, load limits, and with various expirations. This segment markets its products directly to commercial and government organizations. The company’s Health and Employee Benefit Solutions segment provides healthcare payment products and SaaS consumer directed platforms for healthcare payments markets, as well as payroll related benefits to customers in Brazil. Its products include 1Pay and 1Plan payment solution products, as well as ExchangePoint, 1Cloud, and 1Direct SaaS platforms; and employee benefit cards, private label, and processing services for use in the retail, government, and transportation sectors. The company was formerly known as Wright Express Corporation and changed its name to WEX Inc. in October 2012. WEX Inc. was founded in 1983 and is headquartered in South Portland, Maine.

FINANCIAL RATIOS  of  WEX (WEX)

Valuation Ratios
P/E Ratio 73.6
Price to Sales 4.4
Price to Book 3
Price to Tangible Book
Price to Cash Flow -29.7
Price to Free Cash Flow -20.7
Growth Rates
Sales Growth Rate 19.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 4.8%
Cap. Spend. - 3 Yr. Gr. Rate 11.1%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 147.3%
Total Debt to Equity 147.3%
Interest Coverage 2
Management Effectiveness
Return On Assets 2.8%
Ret/ On Assets - 3 Yr. Avg. 4%
Return On Total Capital 2%
Ret/ On T. Cap. - 3 Yr. Avg. 5.5%
Return On Equity 4.7%
Return On Equity - 3 Yr. Avg. 11.6%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 51.7%
Gross Margin - 3 Yr. Avg. 54%
EBITDA Margin 33.9%
EBITDA Margin - 3 Yr. Avg. 40.6%
Operating Margin 19.2%
Oper. Margin - 3 Yr. Avg. 27.8%
Pre-Tax Margin 8.5%
Pre-Tax Margin - 3 Yr. Avg. 22.4%
Net Profit Margin 6%
Net Profit Margin - 3 Yr. Avg. 14.2%
Effective Tax Rate 34.5%
Eff/ Tax Rate - 3 Yr. Avg. 36.3%
Payout Ratio 0%

WEX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WEX stock intrinsic value calculation we used $1018 million for the last fiscal year's total revenue generated by WEX. The default revenue input number comes from 2016 income statement of WEX. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our WEX stock valuation model: a) initial revenue growth rate of 36.6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 8.9%, whose default value for WEX is calculated based on our internal credit rating of WEX, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of WEX.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of WEX stock the variable cost ratio is equal to 73.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for WEX stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for WEX.

Corporate tax rate of 27% is the nominal tax rate for WEX. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the WEX stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for WEX are equal to 85.3%.

Life of production assets of 27.3 years is the average useful life of capital assets used in WEX operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for WEX is equal to -10.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1497 million for WEX - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 41.43 million for WEX is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of WEX at the current share price and the inputted number of shares is $4.3 billion.


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COMPANY NEWS

▶ ETFs with exposure to WEX, Inc. : June 28, 2017   [Jun-28-17 03:09PM  Capital Cube]
▶ WEX Survey Reveals CFOs Thoughts on Future of Payments   [Jun-22-17 06:45AM  Business Wire]
▶ WEX Inc. and GasBuddy Form Strategic Alliance   [Jun-14-17 07:30AM  Business Wire]
▶ WEX Inc. Announces Plans for Potential Debt Repricing   [Jun-12-17 06:30AM  Business Wire]
▶ WEX Named Great Place to Work   [Jun-08-17 07:30AM  Business Wire]
▶ EFS Launches New Mobile Technology for Drivers   [Jun-06-17 07:00AM  Business Wire]
▶ WEX Motopass Fuel Card launches new Online Service Centre   [May-17-17 04:45PM  Business Wire]
▶ WEX, Inc. Value Analysis (NYSE:WEX) : April 27, 2017   [Apr-27-17 05:22PM  Capital Cube]
▶ Wex beats Street 1Q forecasts   [07:52AM  Associated Press]
▶ EFS Expands Relationship with Pilot Flying J   [06:50AM  Business Wire]
▶ Knight Transportation Extends Relationship with EFS   [Apr-04-17 07:30AM  Business Wire]
▶ WEX Expands Asian Virtual Payments Solution to Singapore   [Apr-02-17 04:30PM  Business Wire]
▶ WEX Health Strengthens Position as an Industry Leader   [Mar-23-17 04:20PM  Business Wire]
▶ Hedge Funds Arent Crazy About WEX Inc (WEX) Anymore   [Dec-14-16 04:00AM  at Insider Monkey]
▶ David Cooper Joins WEX as Chief Technology Officer   [Dec-13-16 05:00PM  Business Wire]
▶ Hedge Funds Are Buying NCR Corporation (NCR)   [Dec-01-16 09:37AM  at Insider Monkey]
Stock chart of WEX Financial statements of WEX Annual reports of WEX
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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