Fintech share Nuvei retains Outperform rating with National Bank

Solid quarterly results and strong guidance from management means that financial analyst Richard Tse from National Bank remains positive on the Canadian payment platform Now way (Nuvei stock price, charts, news, analysts, finance NASDAQ:NVEI). Tse provided an update to clients on Wednesday in which he maintained an “Outperform” rating and a $75.00 target price, which at press time implied a one-year return of 114.5 percent.

Montreal-based Nuvei, which provides payment technology solutions for merchants and partners worldwide, announced its fourth-quarter and year-end financial results on Wednesday. Nuvei reported revenue up four percent year-over-year to $220.3 million and total transaction volume up 28 percent to $40.3 billion, with e-commerce representing 91 percent of that volume. Adjusted EBITDA fell by six percent to 85.7 million dollars. (All figures in US dollars.)

For the first quarter of 2023, management called for $39.5-$41 billion in total transaction volume, $248-$256 million in revenue and $92.5-$96 million in adjusted EBITDA. For the year, revenue outlooks are $1,224-$1,264 million and $455-$477 million.

“We have been working diligently to further scale our platform organically and inorganically, diversify the business across high-growth discretionary and non-discretionary verticals, increase our use cases, target more end markets and increase our distribution; all of this together significantly expands our TAM to now include global e-commerce, integrated payments and B2B,” said Philip Fayer, chairman and CEO, in a press release.

Tse said the top line of $220.3 million compared with his estimate of $217.9 million and the consensus call for $219 million, while adjusted EBITDA of $86 million came in above his estimate of $81.5 million but below the Street’s forecast of 88 million dollars.

Tse said the Q4 results as well as management’s guidance suggest continued execution and that he expects growth to accelerate again during the second half of 2023 after an expected continued tough battle for its digital assets and cryptocurrency business during the first half of the year.

“Nuvei has made significant investments in expanding its presence in emerging technology and markets – LatAm and APAC are examples of that with revenues in these regions up 107 percent year-on-year and 90 percent year-on-year respectively. For us, it is the focused approach to growth markets that sets Nuvei apart from its peers. In the quarter, Nuvei also expanded its payment methods (603 total; +17 Q/Q). Beyond that, we like the fact that the company continues to build momentum with Enterprise-level customers as it validates its underlying IP, as well as having lower churn (compared to SMBs),” Tse wrote.

Nuvei’s share price is currently down around 54 percent over the past 12 months, but is up around 48 percent so far in 2023.