Corpay, Inc. (CPAY), headquartered in Atlanta, Georgia, is a payment company that assists businesses and consumers manage vehicle-related expenses, lodging expenses, and corporate payments. Valued at $23.6 billion by market cap, the company offers global payment, currency risk management, and invoice automation solutions which help businesses to control, simplify, and secure payments to corporates, merchants, and payment network consumers.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and CPAY definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the software infrastructure industry. CPAY's strong brand and market leadership in corporate payments are driven by its focus on digital payment innovations, global footprint and, diversified product offerings. Its ability to integrate products with different accounting and ERP systems to provide solutions to complex business payments have strengthened its competitive edge.
Despite its notable strength, CPAY slipped 12% from its 52-week high of $385.30, achieved on Nov. 25. Over the past three months, CPAY stock rose 8.4%, underperforming the Amplify Digital Payments ETF’s (IPAY) 10.8% gains during the same time frame.
In the longer term, shares of CPAY rose 20% on a YTD basis and climbed 21.7% over the past 52 weeks, underperforming IPAY’s YTD gains of 26% and 26.2% returns over the last year.
To confirm the bullish trend, CPAY has been trading above its 200-day moving average since mid-July. Despite the positive price momentum, the stock is trading below its 50-day moving average recently.
CPAY faces regulatory and legal risks due to an ongoing FTC investigation and shareholder lawsuits, contributing to its underperformance. The company is managing these risks through hedging programs, but high debt levels and the FTC investigation remain a concern for investors.
On Nov. 7, CPAY reported its Q3 results, and its shares closed up more than 5% in the following trading session. Its adjusted EPS of $5 surpassed Wall Street expectations of $4.98. The company’s revenue was $1 billion, matching Wall Street forecasts. CPAY expects full-year adjusted EPS to be between $18.90 and $19.10, and expects revenue in the range of $3.98 billion to $4.01 billion.
In the competitive arena of software infrastructure, Global Payments Inc. (GPN) shares lagged behind the stock, declining 12.9% on a YTD basis and 13.9% over the past 52 weeks.
Wall Street analysts are moderately bullish on CPAY’s prospects. The stock has a consensus “Moderate Buy” rating from the 18 analysts covering it, and the mean price target of $393.44 suggests a potential upside of 16% from current price levels.
