Critical Analysis: Freightos (NASDAQ:CRGO) and WEX (NYSE:WEX)

Freightos (NASDAQ:CRGO) and WEX (NYSE:WEX) are both business services companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, profitability, valuation, dividends and risk.

Profitability

This table compares Freightos and WEX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Freightos	-82.31%	-47.17%	-32.99%
WEX	11.43%	48.01%	3.46%

Valuation & Earnings

This table compares Freightos and WEX”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Freightos	$23.78 million	4.42	-$22.49 million	($0.48)	-4.27
WEX	$2.66 billion	2.05	$309.60 million	$8.50	18.74

WEX has higher revenue and earnings than Freightos. Freightos is trading at a lower price-to-earnings ratio than WEX, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

22.7% of Freightos shares are held by institutional investors. Comparatively, 97.5% of WEX shares are held by institutional investors. 19.6% of Freightos shares are held by company insiders. Comparatively, 1.4% of WEX shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Freightos and WEX, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Freightos	1	0	0	0	1.00
WEX	0	12	3	0	2.20

WEX has a consensus target price of $161.55, indicating a potential upside of 1.42%. Given WEX’s stronger consensus rating and higher probable upside, analysts plainly believe WEX is more favorable than Freightos.

Volatility & Risk

Freightos has a beta of 0.17, suggesting that its share price is 83% less volatile than the S&P 500. Comparatively, WEX has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.

Summary

WEX beats Freightos on 12 of the 14 factors compared between the two stocks.

About Freightos

Freightos Limited, together with its subsidiaries, operates a vendor-neutral booking and payment platform for international freight. It operates WebCargo, a platform for connecting carriers and forwarders; and Freightos.com, a platform for connecting service providers to importers/exporters. The company also offers software-as-a-service solutions, such as WebCargo Air for airline rates and ebookings; WebCargo AcceleRate, a multi-modal rate repository; data services; and WebCargo Airline Control Panel that enables airlines to control bookings and optimize pricing with real-time booking analytics. In addition, it provides digital customs brokerage services. The company is based in Jerusalem, Israel.

About WEX

WEX Inc. operates a commerce platform in the United States and internationally. The Mobility segment offers fleet vehicle payment solutions, transaction processing, and information management services; and provides account activation and account retention services; authorization and billing inquiries, and account maintenance services; account management; credit and collections services; merchant services; analytics solutions; and ancillary services and offerings. This segment markets its products directly and indirectly to businesses and government agencies with fleets of commercial vehicles; and indirectly through co-branded and private label relationships. The Corporate Payments segment provides payment solutions, including embedded payments; and accounts payable automation and spend management solutions. This segment also markets its products directly and indirectly to customers in travel, fintech, insurance, consumer bill pay, and media verticals. The Benefits Solutions segment offers software-as-a-service (SaaS) platform for consumer directed healthcare benefits and full-service benefit enrollment solutions. In addition, its SaaS platform includes embedded payment solutions and plan administration services for consumer-directed health benefits; COBRA accounts; and benefit enrollment and administration services. Further, it offers custodial and depository services for health savings accounts; and markets its products through third-party administrators, financial institutions, payroll providers, and health plans. The company was formerly known as Wright Express Corporation and changed its name to WEX Inc. in October 2012. WEX Inc. was founded in 1983 and is based in Portland, Maine.