Fleetcor Technologies Inc

Fleetcor Technologies Inc is one of the leaders in the financial transaction services sector. Fleetcor subsidiaries together offer companies the ability to automate, digitize, and control payments on behalf of suppliers and employees. Within the payment solutions segment, Fleetcor fuel cards are quite popular. These cards allow clients (or their employees/contractors) to pay for fuel using Fleetcor’s cards.

During the first quarter 2020 earnings results, the company revealed that the fuel business did not suffer any major disruption. Volume declines were seen to be leveling off in April and the wide fuel margins aided the North American fuel revenues. The international fuel card business saw a substantial drop in business of almost 25-50% as countries in Europe went into strict lockdowns.

Q12020 revenue came in at $661 million, up 6% Y-o-Y. Corporate payment revenues grew the most on a Y-o-Y basis at 24%. The gift segment was the only one with a revenue decline of 12% Y-o-Y. Cash EPS came in at $3 per share, a growth of 12% Y-o-Y.

According to Ronald Clarke, CEO, Fleetcor Technologies, “Because many of our cardholders are essential workers, first responders, healthcare workers, truckers, rail, construction, they keep right on doing what they do. Also important, most of our volume decline thus far is client softness, not client loss. So good news that it could come back on the other side. And lastly, we’re a 50% EBITDA business so we can continue to make money and generate cash even at these distressed levels of volume.”

Interestingly, analysts polled by FactSet see double-digit upside potential for Fleetcor over the next year. Fleetcor Technologies stock closed at $246.39 on 24th June 2020, down 13.8% for the past month. Fleetcor market cap is currently around $20.65 billion.

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