Value
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.3 |
| P/S | 7.1 |
| EV/EBITDA | 4.7 |
| Fwd P/E | 9.1 |
| PEG | 8.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 11.2x
- ▸PEG: 0.83
CPAY · Why this verdict
Why Corpay (CPAY) is rated BUY WAIT
Updated
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VerdictBUY WAIT
Overall score6.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Corpay's 25% revenue growth, 178% free-cash-flow conversion, wide economic moat, and a Rule of 40 score of 69 place it among the highest-quality businesses in the software infrastructure peer set — but the stock is range-bound near resistance with deteriorating price momentum and a put/call ratio of 1.82, suggesting the market is waiting for a technical breakout to confirm the fundamental thesis before extending.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue is growing at 25% year-over-year with a PEG of 0.85 — indicating that the current price does not fully reflect the growth rate, a rare pairing for a business with demonstrated wide competitive advantages. Growth breakdown | Revenue growth sustains above 20% year-over-year for at least 2 consecutive reported quarters, confirming the current rate is not decelerating toward a level where the valuation argument breaks down. | →Stable |
| CounterOn-balance volume is in distribution and price momentum has slipped below the threshold needed to confirm a breakout — signals the market may already be anticipating a growth slowdown that the reported revenue figures have not yet reflected. | ||
Despite strong fundamental quality and growth, price momentum has slipped below the required threshold — on-balance volume is in distribution and the technical setup remains range-bound near resistance — indicating the market has not yet confirmed the fundamental thesis with a price breakout. Momentum breakdown | A momentum recovery would be visible as price breaks above the $360 resistance level with expanding volume and rising OBV, providing the technical confirmation that has been absent. | →Stable |
| CounterRange-bound consolidation in a high-quality, high-growth business often marks a buying opportunity before the next leg higher; a temporary momentum lapse may simply reflect normal digestion of prior gains rather than structural deterioration. | ||
The business converts 178% of net income into free cash flow, earns a 32% return on equity, scores a Rule of 40 of 69, and carries a wide economic moat — a quality combination that reflects durable compounding potential across market cycles. Quality breakdown | Free cash flow conversion stays above 150% of net income and return on equity holds above 25% over the next four quarters, confirming that the high-quality profile is structural rather than a recent-quarter anomaly. | →Stable |
| CounterA return on equity of 32% at 2.7x debt-to-equity may be materially flattered by a buyback-shrunk equity base; the true return on invested capital could be meaningfully lower, and the leverage leaves less cushion if the cash-generative profile softens. | ||
Three consecutive earnings beats — most recently a 6% upside surprise — demonstrate consistent ability to clear analyst estimates, a pattern that in high-quality businesses tends to drive gradual multiple expansion over time. Bull case | The beat streak continues with at least 2 positive surprises above 0% in the next 3 reported quarters, sustaining the execution-quality signal that supports the quality premium. | →Stable |
| CounterThe magnitude of the beats has been modest, averaging roughly 2.2% above consensus, and the fourth quarter was effectively in-line; a single miss would break a streak the market is likely pricing as a structural feature. | ||
Revenue is growing at 25% year-over-year with a PEG of 0.85 — indicating that the current price does not fully reflect the growth rate, a rare pairing for a business with demonstrated wide competitive advantages.
→StableGrowth breakdown
- Expectation
- Revenue growth sustains above 20% year-over-year for at least 2 consecutive reported quarters, confirming the current rate is not decelerating toward a level where the valuation argument breaks down.
CounterOn-balance volume is in distribution and price momentum has slipped below the threshold needed to confirm a breakout — signals the market may already be anticipating a growth slowdown that the reported revenue figures have not yet reflected.
Despite strong fundamental quality and growth, price momentum has slipped below the required threshold — on-balance volume is in distribution and the technical setup remains range-bound near resistance — indicating the market has not yet confirmed the fundamental thesis with a price breakout.
→StableMomentum breakdown
- Expectation
- A momentum recovery would be visible as price breaks above the $360 resistance level with expanding volume and rising OBV, providing the technical confirmation that has been absent.
CounterRange-bound consolidation in a high-quality, high-growth business often marks a buying opportunity before the next leg higher; a temporary momentum lapse may simply reflect normal digestion of prior gains rather than structural deterioration.
The business converts 178% of net income into free cash flow, earns a 32% return on equity, scores a Rule of 40 of 69, and carries a wide economic moat — a quality combination that reflects durable compounding potential across market cycles.
→StableQuality breakdown
- Expectation
- Free cash flow conversion stays above 150% of net income and return on equity holds above 25% over the next four quarters, confirming that the high-quality profile is structural rather than a recent-quarter anomaly.
CounterA return on equity of 32% at 2.7x debt-to-equity may be materially flattered by a buyback-shrunk equity base; the true return on invested capital could be meaningfully lower, and the leverage leaves less cushion if the cash-generative profile softens.
Three consecutive earnings beats — most recently a 6% upside surprise — demonstrate consistent ability to clear analyst estimates, a pattern that in high-quality businesses tends to drive gradual multiple expansion over time.
→StableBull case
- Expectation
- The beat streak continues with at least 2 positive surprises above 0% in the next 3 reported quarters, sustaining the execution-quality signal that supports the quality premium.
CounterThe magnitude of the beats has been modest, averaging roughly 2.2% above consensus, and the fourth quarter was effectively in-line; a single miss would break a streak the market is likely pricing as a structural feature.
Per-dimension breakdown
Quality
8.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 4.1 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 3.9 |
| FCF quality | 10.0 |
| Moat | 7.5 |
| Rule of 40 | 9.5 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 32%
- ▸Strong margins: 25%
- ▸Excellent cash conversion: 178% FCF/NI
- ▸Wide economic moat
Growth
9.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 8.8 |
| EPS growth | 10.0 |
- ▸Strong growth: 25% YoY
Momentum
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 7.6 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 0.0 |
- ▸Uptrend pullback (RSI 39) - buy opportunity
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 7.3 |
| erm sentiment | 5.0 |
Insider
3.4/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Notable insider selling — $32,907,442 (0.146% of mkt cap)
Peer rank
5.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.6 |
| quality rank | 8.0 |
| growth rank | 6.6 |
- ▸Best-in-class margins
Technical
8.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.6 |
| support resistance | 8.6 |
| 52w position | 8.4 |
Risk (lower is worse)
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.6 |
| days to cover | 5.2 |
| volatility | 4.8 |
| put call | 3.3 |
| implied vol | 5.4 |
| max pain risk | 3.0 |
| beta | 7.8 |
| debt equity | 2.3 |
- ▸Above max pain $230
Catalyst
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 3.6 |
- ▸Strong earnings: 3B/0M
How the verdict was assembled
Engine trigger
Growth is cheap relative to earnings, but the technical setup has not yet produced a breakout above resistance (PEG 0.83, quality 8.3/10, growth 9.4/10).
Engine technical detail
verdict_path:
L4:PATH_C2_GARP_WAIT|ENTRY_STICKY:WITHIN_BANDPassed (7)
- MOMENTUM:4.7>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:41d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.2<1.5@spot
Warning (1)
- MOMENTUM:4.7<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
0.23
Upside
+1.4%
Downside
6.1%
Sizing output
STARTER
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The C-path quality+growth combination triggered the STRONG_BUY_WAIT verdict: quality 8.3 and growth 9.4 both clear their thresholds, with asymmetric R:R of 0.23 supporting the read.
The strongest dimensions are Growth at 9.4, Technical at 8.9, and Quality at 8.3; the weakest are Insider at 3.4, Momentum at 4.7, and Risk (lower is worse) at 4.9. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.23 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1The business converts 178% of net income into free cash flow, earns a 32% return on equity, scores a Rule of 40 of 69, and carries a wide economic moat — a quality combination that reflects durable compounding potential across market cycles.
Trip ifFree cash flow conversion falls below 100% of net income for 2 consecutive quarters, indicating the elite cash-conversion profile is breaking down.
- P2Revenue is growing at 25% year-over-year with a PEG of 0.85 — indicating that the current price does not fully reflect the growth rate, a rare pairing for a business with demonstrated wide competitive advantages.
Trip ifRevenue growth falls below 15% year-over-year for 2 consecutive quarters, eliminating the PEG-below-1 valuation argument.
- P3Three consecutive earnings beats — most recently a 6% upside surprise — demonstrate consistent ability to clear analyst estimates, a pattern that in high-quality businesses tends to drive gradual multiple expansion over time.
Trip ifEPS surprise falls below 0% for 2 consecutive quarters, reversing the established beat streak.
- P4Despite strong fundamental quality and growth, price momentum has slipped below the required threshold — on-balance volume is in distribution and the technical setup remains range-bound near resistance — indicating the market has not yet confirmed the fundamental thesis with a price breakout.
Trip ifPrice breaks above $360 with rising OBV for 3 consecutive weeks, falsifying the thesis that a technical breakout has not yet been confirmed.