WEX rises 3.2% on strong growth despite Q4 earnings miss
Payment processor delivers double-digit earnings growth and upbeat FY2026 outlook
WEX Inc shares rose 3.2% in Wednesday trading after the payment technology company reported fourth-quarter results that missed Wall Street expectations but demonstrated robust year-over-year growth and provided optimistic guidance for fiscal 2026.
The Maine-based financial technology firm reported adjusted earnings per share of $4.11 for the quarter, falling short of analyst estimates of $4.47, according to company disclosures. Revenue reached $672.9 million, slightly below the $683 million consensus forecast. Despite the miss, investors focused on the company's operational momentum, with quarterly revenue climbing 5.7% from the prior year and adjusted EPS surging 15.1% on a comparable basis.
The stock's positive reaction reflects confidence in WEX's core business segments. Corporate Payments revenue surged 17.8% year-over-year, while the Benefits division grew 9.6%. These gains helped drive adjusted free cash flow 13.5% higher to $638 million for the quarter, according to regulatory filings.
"We delivered strong performance across our business segments in the fourth quarter, reflecting the resilience of our payment solutions and the value we deliver to customers in transportation, travel, and healthcare markets," WEX management said in the earnings announcement. "Our operational discipline and focus on high-margin growth are driving meaningful free cash flow generation."
For fiscal 2026, WEX forecast adjusted EPS between $17.25 and $17.85, representing a 9% increase at the midpoint compared to 2025 levels. The company noted that lower fuel prices would reduce earnings by approximately $0.85, suggesting underlying business performance is even stronger than the headline guidance indicates.
The upbeat outlook contrasts with the near-term earnings miss, a pattern that has become increasingly common as companies balance cost pressures against structural growth opportunities. WEX's forward price-to-earnings ratio of 8.69, according to market data, indicates investors are pricing in significant earnings acceleration relative to the trailing 18.79 multiple.
Analysts have maintained a constructive view on WEX, with a consensus target price of $173.60—roughly 17% above current levels—according to market data. Of 14 analysts covering the stock, four rate it a buy equivalent while 10 recommend holding, reflecting cautious optimism about the company's position in the competitive payments landscape.
WEX, which provides payment processing and fleet management solutions across North America, Asia Pacific, and Europe, faces a complex operating environment. The company's fleet management business is particularly sensitive to fuel price volatility, which affects transaction volumes and customer spending patterns. The $0.85 EPS headwind from lower fuel prices in 2026 guidance underscores this exposure.
However, the strong performance in Corporate Payments and Benefits segments highlights WEX's diversification strategy. The company has invested heavily in technology and partnerships to expand beyond its traditional fleet card business, positioning itself as a broader financial technology provider to essential industries.
The 13.5% increase in adjusted free cash flow to $638 million demonstrates WEX's ability to convert revenue growth into cash, a critical metric for technology companies facing high capital expenditure requirements. This cash generation capacity supports both strategic investments and shareholder returns.
Looking ahead, investors will focus on WEX's execution against the FY2026 guidance, particularly its ability to offset fuel price headwinds through operational improvements and margin expansion. The company's success in growing Corporate Payments revenue by nearly 18% while maintaining profitability will be key to sustaining investor confidence.
As financial technology companies face intensifying competition from both traditional players and emerging fintech disruptors, WEX's established relationships in transportation, travel, and healthcare provide defensive moats. The stock's recent gains reflect growing recognition that the company's diversified payments platform can navigate market volatility while delivering sustainable growth.