Stock price when the opinion was issued
NVEI has $466M in revenue in Europe, Middle East and Africa (no individual country breakdown) so certainly is not immune to the sector's slowdown. Large cap US fintech stocks are also getting hit hard this week. Negative momentum does have a way of feeding upon itself, and NVEI's results and guidance and customer loss are adding more concerns for investors. The market backdrop has sharply turned, and small caps are getting crushed all over. NVEI's dividend confused investors, considering its debt. The crypto rally should help it, a bit, but for now fear, anger at the company and higher interest rates are driving the selling.
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NVEI trades at 4X sales; 17X 2023 earnings.
It has $240M net cash (as of last report) and EPS is expected to grow about 15% this year and 20% in 2024.
Cash flow is positive ($258M in 12 months). Its current P/E is very low vs its historical averages, but it has been public less than three years.
Its last quarter was decent and it generally beats expectations (7 for 8).
It just completed a $1.3B acquisition of Paya which will use up its cash (and more) but looks good for longer term growth.
We like its risk/return potential from current levels.
In a normal market we would expect its P/E to move to the 25X range, so 'potential' stock gains are good if it executes well and the overall market co-operates.
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