WEX says it remains bullish on long-term results

File photo / Courtesy WEX WEX Inc. is a global financial technology service provider headquartered in Portland.

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WEX Inc. (NYSE: WEX), the Portland-based financial technology service provider, has reaffirmed its financial growth targets for the next five years and signaled it's hungry for more acquisitions.

The bullish outlook, relayed in a virtual Investor Day presentation last week, comes after the company in February posted fourth-quarter earnings and revenues that exceeded market expectations and issued first-quarter and full-year 2022 guidance.

In the longer term, WEX told investors last week that it expects compound annual organic revenue growth in the range of 8% to 12% and compounded annual total revenue growth in the range of 10% to 15%.

The company also said it expects compounded annual adjusted net income growth of 15% to 20% over the next five years. All of those projections assume stable foreign exchange rates and fuel prices over the next five years.

“Today, WEX is better positioned than ever before as a market leader in each of our businesses, with proven product differentiation, deep expertise, data driven insights, and a platform that is both reliable and scalable," said WEX Chair and CEO Melissa Smith, who was honored as a Mainebiz Business Leader of the Year in 2017.

"Leveraging strong secular tailwinds, we will continue to expand our addressable revenue opportunity by introducing new products, entering new customer segments and extending our geographic reach.”

As for drivers of the expansion, WEX is projecting existing customer growth to have a compound annual growth rate of 4% to 5%, outpacing a compound annual growth rate of 3% to 5% in net new customers, 2% to 3% for mergers and acquisitions and only 1% to 2% for new products.

On the M&A front, the company shared its strategy of identifying targets with complementary solutions to expand WEX's platform and acquire new products, customer segments and geographies.

Out of seven deals closed since 2016, WEX said it is on track to achieve more than $80 million in combined financial benefits.

Recent acquisitions include last year's $275 million purchase of benefitsexpress, a Schaumburg, Ill.-based provider of cloud-based benefits administration technologies and services, and the acquisition of health and savings account assets of HealthCare Bank, of Fargo, N.D., for around $250 million.

WEX shares have a market value of around $7.98 billion, based on Friday's closing share price of $177.91. That's nearly 18% below what shares were trading at a year ago.