Nuvei Corp T.NVEI

Alternate Symbol(s): NVEI

Nuvei Corporation is a Canadian fintech company accelerating the business of clients around the world. Its modular, flexible and scalable technology allows companies to accept payments, offer all payout options and benefit from card issuing, banking, risk and fraud management services. Connecting businesses to their customers in over 200 markets, with local acquiring in 50 markets, 150 currencies and 716 alternative payment methods (APMs), it provides the technology and insights for customers and partners to succeed locally and globally with one integration. Its technology platform is purpose-built for eCommerce, integrated payments and business to business. Its platform enables customers to pay and/or accept payments worldwide regardless of their customers’ location, device or preferred payment method. Its technology includes gateway, global processing, APMs, currency management, global payouts, risk management, card issuing, open banking, data reporting, and reconciliation tools.

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Nuvei Corp

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Post by retiredcfon May 11, 2021 8:09am

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RBC Upgrade

Their upside scenario target is also raised to US$105.00. GLTA

May 10, 2021

Nuvei Corp
Organic growth continues to accelerate

Our view: Nuvei reported Q1 well above expectations. Organic growth accelerated from 36% Q4 to 44% Q1, which reflects on-boarding of new customers, wallet share expansion, and end-market growth. Nuvei is executing well and gaining share from the move into new regions, product categories and markets. We continue to see Nuvei as one of the top ideas in our coverage. Maintain Outperform, price target to US$80.00.

Key points:

• Organic growth accelerates. Nuvei is seeing organic growth accelerate broadly across regions, markets and products. Organic growth rose from 36% Q4 to 44% Q1, with digital (i.e., e-commerce) revenue rising from 80% Q4 to 87% Q1, which implies a 41% Q /Q increase in revenue, without any benefits from seasonality. Management indicated that the upside for Q1 came as demand and new customer wins picked up in March, and was not attributable to U.S. stimulus. As a result, Q1 came in at $150MM revenue, $65MM adj. EBITDA, and $0.35 adj. EPS, above consensus at $141MM, $61MM, and $0.30, respectively.

2• Increase in 2021 outlook. Nuvei raised its 2021 outlook for total volume by 2% (mid-point) to $83-89B, total revenue by 7% (mid-point) to $610-640MM, and adj. EBITDA by 5% (mid-point) to $264-277MM.

The updated guidance exceeds consensus at $595MM revenue and
$250MM adj. EBITDA. Notably, guidance excludes contributions from
Nuvei’s recent acquisitions (Simplex and Mazooma), which suggests the upside stems from stronger organic growth. Following Q1, we’re raising our FY21 estimates to $639MM revenue and $276MM adj. EBITDA from $585MM and $259MM, respectively.

• Building the digital payments platform for the future. Nuvei is building a payments platform for a future that is increasingly more digital. This platform sets up Nuvei for sustained organic growth, as it is likely to see higher wallet share gains at existing customers and increased win rates at new customers. The acquisition of Mazooma enhances Nuvei’s payment technology stack for online gaming and sports wagering merchants. Nuvei is also investing in its cryptocurrency capabilities, adding pay- in and pay-out solutions for nearly 40 cryptocurrencies through the acquisition of cryptocurrency gateway provider Simplex.

Well positioned for 2021 and beyond. With Nuvei’s organic growth strengthening during the second half of 2020 and early 2021, it appears that Nuvei’s momentum is structural as opposed to temporary. This suggests that Nuvei’s organic growth momentum may persist beyond 2021 into future years. As such, we believe that Nuvei’s valuation at 29x CY22E EV/EBITDA, below peers at 41x, is attractive.
Raising price target from US$72.00 to US$80.00. Our $80.00 price target reflects our revised financial estimates and equates to 36x CY22E EV/ EBITDA, up from 34x previously, justified given improving visibility to long-term growth.