Is WEX, Inc. overvalued or undervalued?

As of 4 September 2025, the valuation grade for WEX, Inc. has moved from very attractive to attractive, indicating a shift in its perceived value. The company appears to be overvalued based on its current metrics, particularly with a P/E ratio of 20, which is significantly higher than its peers like ICON plc at 14.64 and Booz Allen Hamilton Holding Corp. at 15.81. Additionally, WEX's EV to EBITDA ratio stands at 6.75, while its peers average around 10.21 and 12.90, respectively, suggesting that WEX is trading at a premium compared to its industry counterparts.
WEX, Inc. has shown strong returns over the long term, with a 3-year return of 14.99% compared to the S&P 500's 70.41%, and a 5-year return of 16.96% against the S&P 500's 96.61%. However, in the shorter term, it has underperformed, with a 1-year return of -16.85% versus the S&P 500's 17.14%. This divergence reinforces the view that WEX, Inc. is currently overvalued relative to its performance and peer group.