Nuvei is heading back to $75, says National Bank

Top and bottom quarterly beats are a good sign from Nuvei Corp (Nuvei Corp Stock Quote, Charts, News, Analysts, Financials NASDAQ:NVEI), according to National Bank Financial Markets analyst Richard Tse, who delivered a report to clients on Nuvei on Thursday. Tse said the company’s solid third quarter results show a company continuing to execute well despite macro and foreign exchange headwinds.

Nuvei, a payments solutions provider with headquarters in Montreal, reported third quarter results which featured revenue up seven per cent year-over-year to $197.1 million and adjusted EBITDA of $81.2 million compared to $80.9 million a year earlier. The company said both top and bottom line numbers were impacted by FX rates to the tune of a $11.5 million hit on revenue and $5 million on EBITDA. Total volume on Nuvei’s platform increased by 30 per cent to $28.0 billion. (All figures in US dollars.)

“We are pleased with our results for the quarter, which exceeded the financial outlook previously provided. Results were driven by higher volumes and wallet share expansion as reflected in our constant currency volume growth of 38 per cent, new client wins, our continued investment in technology and product offerings, and our geographic expansion,” said Philip Fayer, Chair and CEO, in a press release.

For the road ahead, Nuvei management guided for Q4 revenue between $197 and $227 million and adjusted EBITDA between $75 and $84 million to end up with full 2022 revenue and EBITDA of $820-$850 million and $341-$350 million.

Tse called the Q3 numbers solid, with the $197.1 million topline beating both his call at $186.0 million and the consensus forecast at $189.3 million. Adjusted EBITDA at $81.2 million was also above Tse’s estimate at $70.9 million and the Street’s $72.0 million. The Q4 guidance was also in-line with Tse’s and the consensus expectation.

“Bottom line, the quarterly results and outlook suggests continued execution, and we’d expect growth to re-accelerate in H2’23 as the Company laps tough comps in its Digital Assets (Crypto) Business and FX headwinds.” Tse wrote.

Nuvei’s share price has fallen hard over the past 13 months, going from upwards of $130 per share last October to now around the $30 mark. But Tse is staying bullish on the name, reiterating in his report an “Outperform” rating on the stock and a target price of $75.00, which at press time represented a projected one-year return of 155.2 per cent.

“We continue to believe Nuvei is uniquely positioned for growth in a market that’s undergoing a meaningful transformation. Within that market, Nuvei remains a disruptive player with outsized growth relative to the sector,” Tse wrote.