Nuvei Corp (NVEI-T)

A leader in Canada. Report in June highlighted alleged financial discrepancies. Frightened the retail side, though perhaps not the institutional side. Great company, but needs to prove itself over the next quarter or two.

He got stopped out. Still likes it, watches it. Challenge is that unprofitable tech has been left by the market. Market's very particular about numbers and guidance. Wait for the tide to turn.

He bought it early this year. Has been disappointing. It's in the penalty box. He won't own it for long, but holding on for now. That said, there will be a bounce, because the recent sell-off was overdone.

It is in a consolidation pattern and has tried to break out but continues to fall back. If it breaks its low of perhaps $40 for a few days he will sell as a technical trader.

Big presence in e-commerce, gaming. Rapid grower at 20% sustainable growth rate. Inexpensive at 16x earnings. Good acquisition extends presence into less-cyclical verticals like government and healthcare. Pullback on disappointing Q1. Finding technical support. Prognosis is blue skies.

That said, let’s remember that Nuvei shares, currently trading around $58, are a long ways from their 52-week peak of $97.30. It remains a volatile name at a 2.95 beta and a 105.47x PE. However, Nuvei is far better than Lightspeed in virtually every metric. For instance, Nuvei’s EPS is $0.55 EPS compared to Nuvei’s -$10.58 EPS and Shopify‘s -$3.66. Nuvei has easily beaten its last four quarters and carries a healthy balance sheet. Read Dark horses: Nuvei, Cineplex, Boralex for our full analysis.

Scorching hot, Covid-era IPO. Went up in parabolic fashion, and then down symmetrically. Regaining momentum. Global payments company in different verticals like online betting, social gaming, foreign exchange trading. Smaller business in crypto. Recent acquisition deepens exposure in less-cyclical verticals like healthcare, very accretive. Increased revenue guidance. Founder-led. Large addressable market. Despite the runup, undemanding multiple at less than 20x. No dividend.

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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Neither fits his criteria. Hasn't shown ability to produce consistently high ROIC. LSPD still losing money. NVEI's PE ratio is in the 70-90 range. Neither has the proven business model he's looking for; you can lump in DND, SHOP and DCBO too. No track record. Relying on large and lumpy acquisitions, many done at nosebleed valuations. Relies on debt to fuel acquisitions.