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Reasons to Retain FLEETCOR Technologies (FLT) in Your Portfolio

FLEETCOR's (FLT) top line continues to grow organically, driven by continued strong sales, robust retention levels and same-store sales recovery.

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This story originally appeared on Zacks

FLEETCOR Technologies, Inc. FLT has an expected long-term (three to five years) earnings per share growth rate of 17.5%. The company’s earnings are expected to register 17.7% growth in 2021 and 17.9% growth in 2022.

- Zacks

Factors That Auger Well

FLEETCOR’s top line continues to grow organically, driven by continued strong sales, robust retention levels and same-store sales recovery. The company’s organic revenue growth was 17% in the third quarter of 2021.

Acquisitions, over time, have helped FLEETCOR expand its customer base, headcount and operations. The recent acquisition of Associated Foreign Exchange is immediately accretive to the company’s 2021 adjusted EPS and should boost revenues in its corporate payments business. Another acquisition, Roger, is expected to enhance FLEETCOR’s portfolio of accounts payable automation solutions to small businesses.

The company has a track record of returning value to shareholders through share repurchases. In 2020, 2019 and 2018, it repurchased shares worth $849.9 million, $694.9 million and $958.7 million, respectively.

Some Risks

FLEETCOR’s current ratio (a measure of liquidity) at the end of third-quarter 2021 stood at 0.97, which is well below the reading of 1.06 at the end of the second quarter. The decline in current ratio does not bode well.

Zacks Rank and Stocks to Consider

FLEETCOR currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Some better-ranked stocks in the broader Zacks Business Services sector are Avis Budget CAR, Cross Country Healthcare, CCRN and FTI Consulting FCN.

Avis Budget has an expected earnings growth rate of around 453.5% for the current year. CAR has a trailing four-quarter earnings surprise of 76.9%, on average.

Avis Budget’s shares have surged 506.9% in the past year. CAR has a long-term expected earnings growth rate of 18.8%. CAR sports a Zacks Rank #1.

Cross Country Healthcare has an expected earnings growth rate of around 500% for the current year. CCRN has a trailing four-quarter earnings surprise of 75%, on average.

Cross Country Healthcare’s shares have surged 199.9% in the past year. CCRN has a long-term expected earnings growth rate of 21.5%. CCRN carries a Zacks Rank #1.

FTI Consulting has an expected earnings growth rate of around 11.2% for the current year. FCN has a trailing four-quarter earnings surprise of 41.8%, on average.

FTI Consulting’s shares have surged 35.8% in the past year, compared to 57.4% surge of the industry it belongs to. FCN carry a Zacks Rank #2 (Buy).



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