Nuvei Corp NUVCF

Primary Symbol: T.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 Mar 09, 2022 11:19am

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Post# 34499493

RBC Report

Their upside scenario target is US$135.00. GLTA

March 8,2022

Nuvei Corporation Solid momentum continues

Our view: Nuvei delivered another beat-and-raise, with Q4 and FY22 guidance above consensus. Nuvei’s outlook appears conservative and assumes 30-35% organic growth (above medium-term >30% target), taking into account macroeconomic uncertainty and assumed 50% contraction in its crypto vertical. We believe the quarter, >30% organic growth and new disclosures, validate Nuvei’s momentum and competitive advantages. Maintain Outperform.

Key points:
• FY22 guidance above consensus, appears conservative and achievable.

The mid-point of FY22 guidance for $940-980MM revenue (30-35% Y/
Y) and $407-425MM adj. EBITDA (28-34% Y/Y) exceeded consensus at $943MM and $412MM, respectively. The outlook appears conservative and achievable, considering the outlook: 1) incorporates macroeconomic uncertainty; 2) assumes 50% contraction in crypto-related revenue; 3) new disclosures show broad-based momentum in 2021; 4) cohort and net revenue retention suggests high visibility to near-term growth; and 5) Nuvei’s new customer pipeline “has never been stronger”.

• Q1 guidance reflects seasonality and timing of new investments. Q1guidance calls for $208-214MM revenue and $82-85MM adj. EBITDA, with the mid-point of revenue guidance in line with consensus at $211MM and adj. EBITDA guidance below consensus at $93MM. Nuvei has some revenue seasonality, where Q1 has averaged 21.5% of full year revenue over the last 2 years. If historical trends persist, this implies ~$22MM revenue upside to the mid-point of FY22 guidance. Regarding adj. EBITDA, Nuvei’s new marketing investments are front-end loaded.

• Disclosures validate Nuvei’s momentum and competitive advantages. New disclosures validate Nuvei’s success with its land-and-expand strategy, new customer momentum, and importance of its APM value proposition. 2019 cohort customers expanded 38% Y/Y FY21 and net revenue retention improved from 101% FY20 to 146% FY21. The 2021 cohort is 72% larger than 2020, implying strong new customer momentum. Modular Technology revenue rose 138% FY21, showing differentiated software is driving momentum. APM transactions rose

285% Y/Y FY21 and were 26% of FY21 transactions, up from 12% FY20.

Nuvei’s valuation disconnected with +30% organic growth. Nuvei is trading at 13x CY23e EV/EBITDA, which is below high-growth payment peers at 19x, despite faster growth (32% vs. 19%). Valuation is also at the low-end of Nuvei’s historical range. We believe Nuvei’s discount to peers will narrow over time, on greater awareness of Nuvei’s competitive advantages and the sustainability of Nuvei’s growth momentum.
Adjusting target to US$100.00. We believe Nuvei is well positioned to sustain >30% revenue growth. With Nuvei’s valuation below peers, we believe the stock is attractive. We are adjusting our price target from US$145.00 to US$100.00, which is now based on 27x CY23e EV/EBITDA, down from 40x previously, given the material valuation multiple contraction in high growth paying peers.