1. WEX is a bank and takes balance sheet risk. Make sure you exclude the bank deposits from your EV. CPAY isn’t a bank and funds everything off balance sheet. Wex also makes money off
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<p>1. WEX is a bank and takes balance sheet risk. Make sure you exclude the bank deposits from your EV. CPAY isn’t a bank and funds everything off balance sheet. Wex also makes money off the float, which fluctuates of course. </p>
<p>2. WEX is more US centric and over the road centric. This is where margin compression is highest. It’s a bit misleading as WEX claims to have the most small fleets, but those come from partner cards with gas stations (BP’s credit card). Those card partnerships are lower margin and have renewal risk. </p>
<p>3. WEX travel business has high exposure to Expedia and other OTAs. Also where margin compression is highest.</p>
<p>4. WEX just won Bill.com channel partner biz away from CPAy. CPAY didn’t think it was high enough margin, but Wex liked it. Tells you how the different management teams prioritize growth.</p>
<p>5. wex management don’t own much stock and Warburg Pincus just sold out. I like Ron better at CPAY, but meet both and decide for yourself. Read the decisions he made above and to me, I agree with nearly all of them. But WEX also has simplicity - CPAY is actually like 20 different businesses that the author didn’t even bother to list. Ron is a hoarder of value traps. </p>
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