Corpay Stock: Is CPAY Underperforming the Technology Sector?

Corpay, Inc. (CPAY), headquartered in Atlanta, Georgia, operates as a payments company that helps businesses and consumers manage vehicle-related expenses, lodging expenses, and corporate payments. Valued at $21 billion by market cap, the company offers global payment, currency risk management, and invoice automation solutions which help businesses to control, simplify, and secure payment for vehicle related expenses, general payables, tolls, insurance, and lodging expenses.

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 22.3% from its 52-week high of $400.81, achieved on Feb. 6. Over the past three months, CPAY stock rose 2.2%, underperforming the Technology Select Sector SPDR Fund’s (XLK) 10.1% gains during the same time frame.

In the longer term, shares of CPAY fell 11.1% on a six-month basis and dipped 12.8% over the past 52 weeks, underperforming XLK’s 23.5% gains on a six-month basis and 26.1% returns over the last year. 

To confirm the bearish trend, CPAY has been trading below its 200-day moving average since early April, with slight fluctuations. However, the stock has been trading above its 50-day moving average since late November.

On Nov. 5, CPAY reported its Q3 results, and its shares closed up more than 6% in the following trading session. Its adjusted EPS of $5.70 topped Wall Street expectations of $5.63. The company’s revenue was $1.2 billion, meeting Wall Street forecasts. The company expects full-year adjusted EPS in the range of $21.14 to $21.34, and expects revenue ranging from $4.51 billion to $4.53 billion.

In the competitive arena of software infrastructure, Global Payments Inc. (GPN) has taken the lead over CPAY, showing resilience with a marginal downtick on a six-month basis, but lagged behind the stock with 30.6% losses over the past 52 weeks.

Wall Street analysts are reasonably bullish on CPAY’s prospects. The stock has a consensus “Moderate Buy” rating from the 16 analysts covering it, and the mean price target of $356.50 suggests a potential upside of 14.4% from current price levels.