Is WEX, Inc. overvalued or undervalued?

As of 30 April 2025, WEX, Inc. has moved from an attractive to a fair valuation grade. The company is currently fairly valued, with a P/E ratio of 20, an EV to EBITDA ratio of 6.75, and a robust ROCE of 52.70%. In comparison, Charles River Laboratories International, Inc., a peer, has a higher P/E ratio of 22.38, indicating that WEX may be more reasonably priced relative to its competitor.
Despite its fair valuation, WEX has experienced a significant decline in stock performance, with a year-to-date return of -19.26%, contrasting sharply with the S&P 500's positive return of 2.44% over the same period. This underperformance may suggest that the market is pricing in challenges ahead, even as the company's financial ratios remain strong.