Strong Gross Profit Margin
Return on Equity
High Operating Profit Margin
Strong Net Profit Margin
Interest Coverage Ratio
Strong Revenue Growth
Solid Retention Rates
Successful Acquisitions Integration
Guidance for 2025
Expansion Plans in Europe and the Enterprise Segment
Focus on Multi-Currency Account Product
High Price-to-Earnings Ratio
High Price-to-Sales Ratio
High Debt-to-Equity Ratio
Low Current and Quick Ratios
Macro Headwinds Impacting Revenue
Mixed Performance in Lodging and Vehicle Payments
Uncertainty Due to Macro Environment
Overall, Corpay demonstrates a solid business model with strong revenue growth and effective acquisition integration. However, macroeconomic challenges and mixed performance in certain segments present risks. Future prospects appear positive with strategic expansions and product innovations planned for 2025.
Analysis Date: February 5, 2025
Last Updated: March 11, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$538.94
Current Market Price: $289.82
IV/P Ratio: 1.86x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
46.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for CPAY
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (20.11)
P/B ratio ≤ 1.5 (6.46)
Current ratio ≥ 2.0 (1.00x)
Long-term debt < Net current assets (-227.56x)
Margin of safety (46.0%)
CPAY does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
The operating profit margin of 45.42% reflects strong operational efficiency and a solid ability to convert revenue into operating income.
The net profit margin of 25.25% indicates that the company retains a significant portion of its revenues as profit after all expenses, demonstrating effective cost management.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
32.87%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
1.37%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
80.98%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
25.25%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
An interest coverage ratio of 4.71 indicates that the company can comfortably cover its interest expenses from its earnings, suggesting lower financial risk.
A debt-to-equity ratio of 2.14 indicates that the company is heavily leveraged, which may pose risks if cash flows are insufficient to meet debt obligations.
A current ratio of 0.997 and quick ratio of 0.997 indicate potential liquidity issues, as the company has less than one dollar in current assets for every dollar of current liabilities.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
2.12x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.00x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
Corpay reported Q4 revenue of $1,034 million, up 10% year-over-year. The corporate payments line showed impressive organic revenue growth of 26%, indicating strong demand and sales capabilities.
The company's retention rate remained steady at 92%, indicating high customer satisfaction and loyalty, which is crucial for sustaining revenue in a competitive market.
The integration of recent acquisitions, such as Paymerang and GPS, is progressing well, with expectations of delivering $0.50 cash EPS accretion from these deals in 2025.
The company faced unfavorable macro conditions that compressed print revenue by over $100 million, primarily due to weak international currencies and a higher tax rate.
The Lodging and U.S. Vehicle Payments segments have experienced challenges, with the latter only expected to grow modestly, indicating potential underlying issues that need addressing.
Corpay has provided optimistic guidance for 2025, targeting $4.4 billion in revenue and $21 cash EPS, both reflecting an 11% increase, showcasing confidence in business fundamentals.
The company plans to expand its Payables business into the European market and move upmarket to target enterprise clients, opening new avenues for growth.
The planned expansion of the Multi-Currency Account product aims to simplify cross-border transactions for clients, potentially enhancing competitive positioning against traditional banks.
Despite strong underlying business fundamentals, the company faces uncertainty from unfavorable macroeconomic conditions, such as FX rates and interest rates, which could affect growth.