Corpay Inc (CPAY)

Conclusion

Corpay Inc is a payments company that helps businesses and consumers manage and pay their expenses, with fuel, toll and parking payments, corporate payments and lodging payments as its main lines. At 457.97 USD on 2026-11-09, its market capitalisation is 30.07 billion USD.

The verdict is fair. The P/E of 24.23 compares with a ten-year median of 23.46, a premium of 3.25%, and EV/EBITDA of 14.35 compares with a median of 15.42, a discount of 6.92%. The DCF gives 499.89 USD per share at a discount rate of 9.51%, while the fair value from historical multiples is 443.58 USD. The fair value band runs from 377.38 to 566.08 USD with a midpoint of 471.73 USD, a margin of safety of 3.0% at the current price. The reverse DCF implies growth of 9.6% a year, against revenue growth of 13.65% over five years and free cash flow per share growth of 2.61% over the same period.

The strongest numbers are ROIC of 13.34% against a WACC of 7.85%, a free cash flow conversion of 1.07 over the trailing twelve months, and a five-year share count change of -3.91%, which reflects buybacks. The weakest are the Altman Z-score of 1.71, in the distress zone, a quick ratio of 0.49, and net debt to EBITDA of 3.06. A fall in margins or a rise in leverage would weaken the case, since the net margin of 23.73% already sits below its ten-year median of 28.66%.

Financial health

Financial strength is grey, because debt is part of the company's trade as a payments business, so the standard tests do not fully apply. The current ratio is 0.95 and the quick ratio is 0.49, both low. Net debt to EBITDA is 3.06, debt to equity is 3.41 and interest coverage is 4.92, all flagged as watch. The Altman Z-score of 1.71 falls in the distress zone, but that model was designed for manufacturers, which Corpay is not. Insolvency risk is not applicable: the Ohlson model does not apply to a financial business. Debt has grown by 5% a year over five years, against revenue growth of 13.65% over the same period.

Earnings quality

Earnings quality is green. Free cash flow conversion of 1.07 over the trailing twelve months and 1.38 over five years supports reported profit, and the accrual ratio of -0.02 shows cash earnings exceeding accounting earnings. Stock-based compensation is 2.31% of revenue, and free cash flow after it is 1.21 billion USD. The share count fell at a compound rate of 3.91% over five years, which reflects buybacks. The Piotroski score is 5 out of 9, which is neutral. The Beneish M-score of -1.80 is in the unlikely range for manipulation. The company beat earnings expectations in 7 of the last 8 quarters, with an average surprise of 2.7%. Analysts raised the current-year estimates with no cuts in the last 30 days, and next-year estimates show a 1.25% change over 90 days.

Profitability

Profitability is green. The gross margin is 75.25% against a ten-year median of 79.07%, the operating margin is 41.04% against 43.48%, and the net margin is 23.73% against 28.66%, so all three sit below their medians. Operating margin stability is 4.88%. ROIC of 13.34% against a WACC of 7.85% gives a ROIC minus WACC of 5.49%, which the model reads as creating value. The five-year median ROIC is 12.85%. Return on equity is 37.65%, but the DuPont split shows the equity multiplier of 6.80 does most of the work, with a net margin of 23.62% and an asset turnover of 0.17. Much of the return on equity therefore comes from leverage rather than operations.

Growth

Growth is green. Revenue grew at a compound rate of 9.73% over three years, 13.65% over five years and 10.27% over ten years. Revenue rose in 9 of the last 10 years. Earnings per share grew at 6.64% over three years, 13.14% over five years and 14.61% over ten years. Free cash flow per share grew 32.55% over three years, but only 2.61% over five years and 9.22% over ten years, so the recent acceleration rests on a short window. Analysts expect next-year earnings per share growth of 15.02%.

Valuation

Valuation is yellow, with the single verdict signal neutral. The P/E of 24.23 is 3.25% above its ten-year median of 23.46, and EV/EBITDA of 14.35 is 6.92% below its median of 15.42. Price to free cash flow of 22.55 is 16.86% above its median of 19.30, price to sales of 5.75 is 15.90% below its median of 6.84, and price to book of 9.12 is 47.96% above its median of 6.16. The DCF gives 499.89 USD per share, using a discount rate of 9.51%, growth of 13.65% for the first stage and 2.5% in the terminal stage. The terminal value makes up 57.72% of the DCF. The fair value from historical multiples is 443.58 USD. The fair value band runs from 377.38 to 566.08 USD, with a midpoint of 471.73 USD. These values are order-of-magnitude estimates built on fixed assumptions, such as a 5% equity risk premium and capped growth, not price targets. The company pays no dividend. The free cash flow yield is 4.43% and the earnings yield is 4.13%.

Risks

The weakest numbers would hurt in specific ways. A quick ratio of 0.49 and a current ratio of 0.95 leave little cash to cover short-term obligations if markets tighten. Net debt to EBITDA of 3.06 and interest coverage of 4.92 mean rising interest costs or weaker earnings would squeeze the margin for error. The Altman Z-score of 1.71 signals the same financial strain. A net margin below its ten-year median of 28.66%, currently at 23.73%, would reduce the cash available to service debt. Because the terminal value makes up 57.72% of the DCF, changes in long-term growth or the discount rate would move the valuation considerably. Not available: the debt maturity schedule and revenue by segment, so the timing of refinancing needs and the mix of growth cannot be assessed. This analysis rests only on the figures provided and does not cover events after the dates stated.