In June 2024, Investing.com's Fair Value models identified a significant undervaluation in Corpay, Inc. (NYSE:CPAY), leading to an impressive 52% return for investors who followed the analysis. This success story demonstrates the power of data-driven valuation models in identifying market inefficiencies and creating profitable investment opportunities. For investors seeking similar opportunities, our Most undervalued list continues to highlight stocks with significant upside potential.
Corpay, a leading provider of B2B payment solutions and corporate expense management services, showed strong fundamentals when our models first flagged the opportunity. With revenues of $3.79 billion and EBITDA of $2.02 billion, the company demonstrated solid operational performance despite its then-undervalued stock price of $249.66.
The Fair Value analysis proved remarkably accurate, with the stock climbing steadily over the following months to reach $357.42 by January 2025. This 52.15% return significantly exceeded the initial estimated upside of 38.16%, validating the model's effectiveness. During this period, Corpay's fundamentals continued to strengthen, with revenue growing to $3.88 billion and EBITDA reaching $2.07 billion.
Recent developments have further supported the original thesis. Barclays (LON:BARC) raised their price target to $440 in December 2024, while strategic acquisitions of GPS Capital Markets and Paymerang enhanced the company's market position. The company's Corporate Payments segment has been particularly impressive, growing at twice the rate of the overall business, while maintaining a robust 95% revenue retention rate.
InvestingPro's Fair Value methodology combines multiple valuation approaches, including discounted cash flow analysis, comparable company metrics, and market-based factors. This comprehensive approach helps investors identify opportunities where market prices significantly diverge from intrinsic value, as demonstrated in Corpay's case.
The success of this analysis showcases the power of data-driven investment decisions. InvestingPro continues to provide similar actionable insights through its Fair Value models, comprehensive financial analysis, and real-time market intelligence. Whether you're looking to identify undervalued opportunities or optimize your investment timing, InvestingPro's tools can help you make more informed investment decisions.
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