WEX Inc. (NYSE:WEX) shareholders are probably feeling a little disappointed, since its shares fell 6.0% to US$217 in the week after its latest quarterly results. Statutory earnings per share fell badly short of expectations, coming in at US$1.55, some 24% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$653m. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for WEX

Following the latest results, WEX's 14 analysts are now forecasting revenues of US$2.75b in 2024. This would be an okay 6.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 49% to US$9.41. Before this earnings report, the analysts had been forecasting revenues of US$2.74b and earnings per share (EPS) of US$10.23 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at US$254, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on WEX, with the most bullish analyst valuing it at US$285 and the most bearish at US$220 per share. This is a very narrow spread of estimates, implying either that WEX is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that WEX's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 8.2% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.2% per year. So it's pretty clear that, while WEX's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for WEX. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for WEX going out to 2026, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with WEX , and understanding this should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.