The advanced “neural engine” in the M4 chip will enable AI-based features. (Photo: 123RF)
What to do with the titles of Nuvei, Apple and Stella Jones? Here are some analyst recommendations likely to move prices soon. Note: the author may have a completely different opinion than that expressed by the analysts.
Nuvei (NVEI, $44.65): good start for 2024, privatization is on track
Nuvei reported its first quarter results with revenue above expectations thanks to higher than expected volumes.
Organic growth excluding foreign exchange was 9%, ahead of the comparable 7% in the fourth quarter and ahead of analysts’ expectations.
Nuvei is off to a strong start to 2024, with total volumes of US$60.1 billion (US$B) compared to the US$57.1B estimate and US$57B to US$58B forecast. Kevin Krishnaratne, analyst at Scotiabank Financial.
The increase in volumes helped Nuvei beat revenue to US$335.1 million compared to the analyst’s forecast of US$322 million to US$330 million.
Global Commerce, which represents 57% of Nuve’s turnover, increased by 13% and B2B, 19% of turnover with an increase of +16%.
Gross margin increased 200 basis points YoY to ~81%, in line with analyst estimates.
Earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately US$115 million came close to the upper end of guidance of US$110 million to US$116 million for a margin of 34.3%. Compared to 37.5% in the period of the previous year.
Margins declined due to the dilutive impact of Till Payments.
In light of the proposed transaction with Advent, Nuvei is suspending earnings conference calls as well as its practice of providing financial outlooks. As a result, it withdraws the previous financial targets set for 2024 in addition to its medium and long term targets.
Kevin Krishnaratne’s forecast remains largely unchanged with a 2024 adjusted EBITDA forecast of $497.4 million with a margin of 36.1%
The analyst recalls that the company is pursuing multiple initiatives to improve the cost structure in the coming quarters, including synergies with Paya, operating expense savings for the entire company and opportunities in of artificial intelligence.
The analyst maintains his target price of $34 for Nuvei’s stock, as well as his neutral recommendation and his forecast of performance equal to the sector.
