Corpay, Inc (CPAY): what the price requires

At today's price, Corpay, Inc (CPAY) is priced for +0.0% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-14 · Exported: 2026-07-17 · Source: https://boothcheck.com/report/CPAY

Headline

FieldValue
TickerCPAY
CompanyCorpay, Inc
Current price$360.67/sh
CompositionVehicle Payments 50% / Corporate Payments 39% / Lodging Payments 11%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed7.5%
Operating margin today45.5%
Margin compression implied-38.0pp
Implied growth0.0%
Multiple paid15x operating income

The operating-margin requirement is derived from the framework's value band at year 11, a separately labeled basis from the headline growth/duration solve.

Solve inputs: computed at a 8% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.5pp.

Reconcile: at the x-ray's 9.3% required return this reads ~8%/yr; the models below use their own rates.

How unusual the bet is: within-range

ReferenceValue
vs own history-2.38σ
cohort percentile (of 210 peers)35
implied end-window share0%

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.94x5expensive
Earnings3.27x5expensive
Relative0.98x5justifies
Growth0.81x2justifies

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.1%); the inversion above states its own rate.

Per-Model Detail (n=17)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth——no—
DCF Exit MultipleGrowth$569.110.63xyesExit EV/EBITDA: 11.8x / 13.8x / 15.8x (bear / base = today's held flat / bull), 6yr
Relative ValuationRelative$386.590.93xyesP/E 20x (static sector reference · 2026-04), scenarios: 16.3x / 20.0x / 23.7x (bear / base = reference held flat / bull), EV/EBITDA 14x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$185.861.94xyesBV/sh $51.29, ROE (TTM) 33.5%, ke 9.3%
Two-Stage Excess ReturnAsset$373.790.96xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$365.960.99xyesRev $4.8B, growth 18% (input: historical growth; tapered), Terminal P/S: 4.2x / 5.2x / 6.1x (bear / base = today's held flat / bull, cap 12x)
Peter Lynch Fair ValueRelative$298.431.21xyesEPS $16.70, growth 18% (input: historical EPS growth), PEG=1.17 (Fair)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$110.273.27xyesNormalized EBIT (5y avg op income, one-time charges added back) $1.70B × (1−30%) / WACC 6.1% → EPV (no growth)
Residual IncomeAsset$287.971.25xyesBV $51.29 + 5yr PV of (ROE (TTM) 33.5% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$138.822.60xyes√(22.5 × EPS $16.70 × BVPS $51.29) — Graham's conservative floor
EV/EBITDA RelativeRelative$366.580.98xyesEBITDA $2.62B × sector EV/EBITDA 14.0x
FCF YieldEarnings$37.829.54xyesFCF $1310.4M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$20.1617.89xyesSBC-adj FCF $1.20B (FCF $1.31B − SBC $0.11B) capitalized at Kₑ
Ben Graham FormulaEarnings$538.850.67xyesEPS $16.70 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$24.8914.49xyesBV $51.29 × (ROIC 3.0% / WACC 6.1%)
P/Sales SectorRelative$104.843.44xyesRevenue $4.78B × sector P/S 1.5x
PEG Fair ValueRelative$447.640.81xyesEPS $16.70 × (PEG 1.5 × growth 17.9% (input: historical EPS growth)) → PE 26.8x
Earnings YieldEarnings$180.542.00xyesEPS $16.70 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$7.8b
Net debt / NOPAT (after-tax)5.41x
Net debt / operating income (pre-tax)3.79x
Interest coverage5.2x
Share count CAGR (buyback)-3.6%
Burning cashno

Bullet Takeaways

Bull Case

Open with the loudest worry about Corpay and then test it against the data. The bear refrain on this company has long been that it is a fuel-card business in secular decline, exposed to electric vehicles, falling fuel consumption, and a maturing core. If that were the whole story, the 25% revenue growth and 29% cash-EPS growth Corpay just posted in Q1 2026 would be impossible. The data undermines the fear: the portfolio has rotated. Corporate payments delivered 16% organic growth (18% excluding float compression), drove $82B in spend volumes, an organic increase of 43%, and now make up 40% of total revenue, up from 35% a year earlier. The fuel-card anxiety is aimed at a business that is shrinking as a share of the whole while the growth engine takes over.

The economics underneath are excellent. Corpay's 10-K describes how it earns "interchange or spread revenue" as a party to each transaction and "may also charge fixed fees for access to the network and ancillary services" (accession 0001175454-26-000018), a high-margin, transaction-linked model that scales with payment volume rather than headcount. Operating margins run near 46%, and return on equity is near 33%. The legacy vehicle-payments business is not even dead: US fleet same-store sales turned positive at plus 1% versus minus 2% a year ago, and vehicle payments grew 10%, so the part the market fears most is actually stabilizing while the corporate and cross-border divisions, including the Alpha and Avid acquisitions, grow well above company average.

The valuation does not require heroics. At $346.00 the market is paying about 15x company-wide operating income, which inverts to roughly flat-to-slightly-negative implied operating growth. For a company compounding revenue at 25% and raising full-year guidance to about $5.29B in revenue and $26.70 in cash EPS, that is an undemanding bar. The relative-multiple lens lands near $387, above the price, and the discounted-future-market-cap method lands near the price, both consistent with the actual growth profile. Management has framed a midterm plan to double cash EPS to $50, generate $15B in cash, and repurchase over half the shares at current levels. The bull case is that the market is still pricing the old FleetCor narrative into a company that has become a corporate-payments compounder, and the gap between perception and the numbers is the opportunity.

Bear Case

The bear case is about what the price leans on, and despite the mild headline multiple, the most fragile assumption is the durability of the corporate-payments growth and the acquisitions that fuel it. Corpay has built much of its expansion through deals, Alpha and Avid most recently, and a roll-up depends on continuing to find and integrate targets at attractive prices. The midterm plan to double cash EPS to $50 and repurchase over half the share count is ambitious, and it implicitly assumes both the acquisition pipeline and the organic corporate-payments growth hold up. If either falters, the EPS bridge breaks, and the part of the story the market is paying a premium for, the rotation away from fuel cards, slows.

The second fragility is float and rate sensitivity. Corpay earns income on customer funds it holds between transactions, and management explicitly called out float compression as a 2-point drag on corporate-payments growth (16% reported versus 18% ex-float). That float income rises and falls with interest rates, so a rate-cut cycle would directly trim a high-margin revenue stream that the market may be extrapolating at peak levels. The cross-border business also carries currency and counterparty risk that scales with the $82B in spend volumes it now processes.

The valuation methods that ignore the growth flag the price as expensive. The asset-based simple-excess-return lands near $186, Earnings Power Value near $114, and the Graham number near $139, all far below the $346 price (June 27, 2026); the blended X-ray near $374 is close to the price only because the growth-weighted methods pull it up. Corpay also carries net debt near $7.9B from its acquisition strategy, so leverage funds the growth, and the FCF-yield reading is depressed. The bet against Corpay is not that the corporate-payments pivot is fake. It is that the price assumes the acquisition machine, the organic growth, and the float income all keep working together, and a stumble in any one of them, a dry deal pipeline, a rate-driven float decline, or a corporate-spend slowdown, would expose how much of the premium rests on continuation rather than current earnings power.

Valuation

At $346.00, inverting the price puts Corpay at roughly 15x company-wide operating income, which solves to about negative 1% implied operating growth over a five-year stage at a 7.9% cost of capital. That is a notably mild bar: the market is not extrapolating Corpay's 25% revenue growth: it is barely asking the business to hold flat. Each percentage point of cost of capital moves the implied figure by about 6.5 points, so the read is rate-sensitive, but the central assumption is undemanding for a company growing as fast as Corpay is.

The model families split along the usual line for a high-return compounder. The relative-multiple lens lands near $387, above the price, and the discounted-future-market-cap method near $351, essentially at the price, both consistent with the actual growth. The exit-multiple DCF lands near $556, well above. The asset and earnings-power lenses are the cautious side: two-stage excess return near $374, simple excess return near $186, and Earnings Power Value near $114, the last reflecting normalized EBIT capitalized with no growth. The blended X-ray near $374 sits slightly above the price.

The valuation conclusion is that the price is justified by the relative-multiple and growth methods while the asset and earnings-power frames call it full, which is the normal signature of a profitable, fast-growing business. The mild implied-growth bar means the market is not paying for heroic assumptions; it is paying a reasonable multiple for a 46%-margin, 33%-ROE payments compounder. The deciding variable is whether the corporate-payments growth and the acquisition-driven EPS plan hold, because that is what separates a fair price from a cheap one here, not whether the business merely survives.

Catalysts

The corporate-payments trajectory is the catalyst that defines the thesis. The segment grew 16% organically (18% ex-float), processed $82B in spend volumes, and reached 40% of revenue. Continued share gains and organic growth in this division are what validate the rotation away from fuel cards; the quarterly organic growth rate is the cleanest signal.

The raised guidance and midterm plan set the bar. Management lifted full-year 2026 guidance to about $5.29B in revenue and $26.70 in cash EPS, after Q1 2026 revenue of $1.26B up 25% and cash EPS of $5.80 up 29%. The longer-term framework, doubling cash EPS to $50 and repurchasing over half the shares, depends on execution that the next several prints will start to test.

Portfolio moves are the structural catalysts. Management flagged a significant non-core divestiture in late-stage negotiations plus bolt-on acquisitions in cross-border and payables; completed deals or divestitures would reshape the mix toward higher-growth payments. Watch fleet same-store sales, which turned positive at plus 1%, for confirmation the legacy base is stabilizing. The main external variable is interest rates, which drive the float income embedded in corporate-payments revenue.

Sources: Corpay Q1 2026 earnings call (BigGo Finance), Corpay Q1 2026 transcript (Motley Fool), Corpay research report (StockStory)

Peer Cohorts (Per Segment, With Filing Citations)

Vehicle Payments (reported)

Corporate Payments (reported)

Lodging Payments (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive CPAY report on boothcheck