FLT - Embedded Expectations Analysis - 2020 09 22
FLEETCOR Technologies, Inc. (FLT:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) earnings, with a 22.6x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, and management may be concerned about their revenue growth, product mix, and payments businessSpecifically, management may lack confidence in their ability to drive a rebound from a poor Q2, bring their sales back to 2019 levels, and achieve their target profit growth. Furthermore, they may be concerned about the impacts of coronavirus on their operating margins, their T&E business, and their product mix in the corporate payments business. In addition, they may lack confidence in their ability to sustain the resiliency of their business, meet the increasing demands in their card business, and maintain a dominant position in the toll business. Management may also be downplaying credit concerns and their ability to keep selling their services in this environment. Finally, they may lack confidence in their ability to improve business volume, and they may be exaggerating the potential of their liquidity
FleetCor Technologies is provider of commercial payment solutions. The company's five primary product lines are Fuel, which provides fuel payment solutions to businesses and government entities who operate vehicle fleets, as well as to main oil companies;Lodging, which provides lodging payment solutions to employees who travel overnight for work purposes; Tolls, which provides an electronic toll and parking payments product; Corporate Payments, which include virtual cards, purchasing cards, travel and entertainment cards; and Gift, which provides gift card product management and processing services. Additionally, the company provides other payment products including fleet maintenance and employee benefits.
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