Corpay (CPAY)

Business payments company Corpay (NYSE:CPAY) reported revenue ahead of Wall Streets expectations in Q3 CY2025, with sales up 13.9% year on year to $1.17 billion. The company’s full-year revenue guidance of $4.52 billion at the midpoint came in 1.3% above analysts’ estimates. Its non-GAAP profit of $5.70 per share was 1% above analysts’ consensus estimates.

Company Overview

Formerly known as FLEETCOR until its 2024 rebrand, Corpay (NYSE:CPAY) provides specialized payment solutions for businesses to manage vehicle expenses, corporate payments, and lodging costs with enhanced control and reporting capabilities.

Diversified financial services encompass specialized offerings outside traditional categories. These firms benefit from identifying niche market opportunities, developing tailored financial products, and often facing less direct competition. Challenges include scale limitations, regulatory classification uncertainties, and the need to continuously innovate to maintain market differentiation against larger competitors expanding their offerings.

In Vehicle Payments, Corpay competes with WEX, U.S. Bank Voyager Fleet Systems, Edenred, and DKV. Its Corporate Payments solutions face competition from financial institutions like American Express, as well as specialized providers such as Coupa, AvidXchange, and Bill.com. In Lodging Payments, competitors include traditional travel management companies like American Express Global Business Travel.

A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Thankfully, Corpay’s 11.8% annualized revenue growth over the last five years was solid. Its growth beat the average financials company and shows its offerings resonate with customers, a helpful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Corpay’s annualized revenue growth of 7.9% over the last two years is below its five-year trend, but we still think the results were respectable. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Corpay reported year-on-year revenue growth of 13.9%, and its $1.17 billion of revenue exceeded Wall Street’s estimates by 0.6%.

Financial services companies rely heavily on the total number of transactions and loan originations to drive top-line growth. Understanding these volumes is essential for finding winners in the sector.

Corpay’s volumes have grown at an annual rate of 13.6% over the last five years, a step above the broader financials industry and faster than its total revenue. When analyzing Corpay’s volumes over the last two years, we can see that growth accelerated to 19.5% annually. Its recent performance could be a sign of better days to come.

Corpay’s volumes punched in at $223.5 million this quarter, beating analysts’ expectations by 0.9%. This print was 8.1% higher than the same quarter last year.

Revenue growth is one major determinant of business quality, and the efficiency of operations is another. For Diversified Financial Services companies, we look at pre-tax profit rather than the operating margin that defines sectors such as consumer, tech, and industrials.

This is because for financials businesses, interest income and expense should be factored into the definition of profit but taxes - which are largely out of a company's control - should not.

Over the last four years, Corpay’s pre-tax profit margin has risen by 4.9 percentage points, going from 40.4% to 35.5%. Expenses have stabilized more recently as the company’s pre-tax profit margin was flat on a two-year basis.

Corpay’s pre-tax profit margin came in at 36% this quarter. This result was 1.2 percentage points better than the same quarter last year.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Corpay’s decent 13% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

Corpay’s two-year annual EPS growth of 11.9% was decent and topped its 7.9% two-year revenue growth.

Diving into Corpay’s quality of earnings can give us a better understanding of its performance. A two-year view shows that Corpay has repurchased its stock, shrinking its share count by 4.7%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

In Q3, Corpay reported adjusted EPS of $5.70, up from $5 in the same quarter last year. This print beat analysts’ estimates by 1%. Over the next 12 months, Wall Street expects Corpay’s full-year EPS of $20.70 to grow 13.6%.

Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for banks. Over a long period, banks with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.

Over the last five years, Corpay has averaged an ROE of 31.3%, exceptional for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows Corpay has a strong competitive moat.

The debt-to-equity ratio is a widely used measure to assess a company's balance sheet health. A higher ratio means that a business aggressively financed its growth with debt. This can result in higher earnings (if the borrowed funds are invested profitably) but also increases risk.

If debt levels are too high, there could be difficulties in meeting obligations, especially during economic downturns or periods of rising interest rates if the debt has variable-rate payments.

Corpay currently has $6.37 billion of debt and $4.08 billion of shareholder's equity on its balance sheet, and over the past four quarters, has averaged a debt-to-equity ratio of 2.1×. We think this is safe and raises no red flags. In general, we’re comfortable with any ratio below 3.5× for a financials business.

It was good to see Corpay provide full-year revenue guidance that slightly beat analysts’ expectations. We were also glad its full-year EPS guidance slightly exceeded Wall Street’s estimates. Overall, this print had some key positives. The stock traded up 2.3% to $268.01 immediately after reporting.

Updated: December 4, 2025 at 11:39 PM EST

We think that the latest earnings result is only one piece of the bigger puzzle. If you’re deciding whether to own Corpay, you should also grasp the company’s longer-term business quality and valuation.

Corpay possesses a number of positive attributes. First off, its revenue growth was solid over the last five years and is expected to accelerate over the next 12 months. And while its declining pre-tax profit margin shows the business has become less efficient, its stellar ROE suggests it has been a well-run company historically. On top of that, its transaction volume growth was solid over the last five years.

Corpay’s P/E ratio based on the next 12 months is 12.4x. Looking at the financials landscape right now, Corpay trades at a pretty interesting price. If you’re a fan of the business and management team, now is a good time to scoop up some shares.

Wall Street analysts have a consensus one-year price target of $351.25 on the company (compared to the current share price of $297.62), implying they see 18% upside in buying Corpay in the short term.