Fleetcor is an Atlanta-based payments company. It specializes in fuel cards, lodging discount cards, and other services like toll payments and corporate gifting. Fleetcor’s customers are businesses like oil companies, commercial fleet operators, and petroleum marketers. Government entities also use Fleetcor’s products and services. When you think about technology stocks, you probably focus on software and hardware companies. You think about Zoom, Docusign, and Adobe. However, companies like Fleetcor are well-poised for growth once the pandemic subsides and corporate activity starts to pick up. Therefore, Fleetcor may be a decent option for the mid to long-term.
Revenues Down 14% For Q32020
Fleetcor reported its third-quarter 2020 earnings in November 2020. Revenues fell from $681 million to $585 million, a drop of 14% year-on-year. Gifting revenues dropped the most at 19% while lodging revenues dropped the least at a relatively modest 6%. Geographically, UK revenues were the only ones to rise on a year-on-year basis as all other geographies saw a drop in business. Diluted earnings per share dropped from $2.49 to $2.19.
Company CEO Ron Clarke said, “We’re pleased that our third quarter volumes stepped up sequentially in every line of business, driven primarily from increasing existing client usage. New sales performance also improved dramatically in the quarter, returning to 80% of prior period levels”. He further added, “Client retention and credit trends were also very encouraging in the quarter and better than last year.”
Fleetcor’s stock has grown from $118 to $275 in a 5-year period. Since the March market crash, the stock has bounced back almost 60%. The returns for Fleetcor aren’t as spectacular as an AMD that has grown from around $2 in early 2016 to $91 in early 2021. However, the long term prospects of Fleetcor appear bright once corporate travel and business activity bounce back from the pandemic-driven crisis.