Nuvei Corporation (TSE:TSX:NVEI) (NASDAQ:NVEI) experienced a significant surge in share value on Wednesday, November 8, 2023, following the release of its third-quarter earnings report late on Tuesday. Despite reporting a quarterly loss of US$18.1 million or 14 cents per share, contrasting with last year's net income of US$13.0 million or eight cents per share, the company's shares spiked by 19.8% in late-morning trading on the Toronto Stock Exchange.
The Montreal-based payment tech firm reported a total payment volume growth of 72% to $48.2 billion, including a 20% rise in organic total volume at constant currency rates. This robust performance was attributed to factors such as new customers, wallet share expansion, new product features, and geographic growth. The firm saw a rise in global commerce revenue by 25%, B2B, government, and ISV revenue by 16%, while SMB revenue fell by 4%. The company's differentiation strategy involves providing differentiated technology solutions to meet customer demands for services across all payment mediums.
During an earnings call on Wednesday (Nov. 8), CEO Philip Fayer confirmed that the company's strategies of signing customers to live faster have yielded positive results. Teams focusing on customer engagement and new customer acquisition have been effective, with sales enablement playing a key role in client onboarding.
Even though its adjusted net income of $56.8 million fell short of analysts' forecast of $0.41 per share, with adjusted earnings falling to 39 cents per diluted share from the previous year's 43 cents, this did not deter an overall revenue generation of $304.9 million, up over 50% from US$197.1 million in the same quarter last year and slightly surpassing the anticipated $303.49 million.
Despite the quarterly loss and missing the earnings forecast, Nuvei's adjusted EBITDA increased by 36% to $110.7 million, accounting for 35.9% of the total revenue. This growth is reflective of the firm's strong financial health and operational efficiency.
In light of these results, Nuvei has revised its outlook for 2023 upward from initial expectations, now predicting revenues between $1.18 billion and $1.2 billion, and adjusted EBITDA between $427 million and $435 million. These projections mark a significant increase from previous estimates. The company also raised its full-year outlook to a total volume of $198 billion to $200 billion and revenue of $1.175 billion to $1.195 billion, backed by positive October and November trends.
Wall Street analysts remain optimistic about Nuvei's future performance, maintaining a strong buy consensus on NVEI stock. The average price target stands at C$41.23 per share, suggesting a potential upside of 55.69%.
InvestingPro Insights
In line with the optimistic forecast for Nuvei Corporation, InvestingPro provides valuable insights that can further inform your investment decisions.
InvestingPro Tips reveal that Nuvei displays high earnings quality, with free cash flow exceeding net income, indicating a healthy financial position. Moreover, net income is expected to grow this year, which aligns with the company's raised outlook for 2023. However, it's worth noting that the stock price movements have been quite volatile, and the stock has taken a significant hit over the last six months.
Real-time data from InvestingPro shows a market cap of 2190M USD and a P/E Ratio of 115.07, suggesting a high earnings multiple. The Revenue for the last twelve months as of Q2 2023 stands at 981.01M USD, with a growth of 19.4 %. The Gross Profit Margin for the same period is at a robust 79.91 %.
These insights, along with hundreds of additional tips, are available with InvestingPro.
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