The S&P/TSX Composite Index climbed 158 points to close out the previous month. Meanwhile, the S&P/TSX Capped Information Technology Index was one of the strongest performers in March’s final trading session. Canadian technology stocks are still some of the most explosive equities available. Today, I want to target Nuvei (TSX:NVEI), a Montreal-based company that provides payment technology solutions to merchants and partners in North America and around the world. This tech stock has been scorching in the opening quarter of 2023. Should investors be eager to jump on for the ride? Let’s dive in.
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How has this stock performed so far in 2023?
Shares of Nuvei shot up 27% month over month as of close on March 31. Meanwhile, this tech stock has surged 68% so far in 2023. However, its shares are still down 39% in the year-over-year period. Investors who want a more detailed look can open the integrated price chart below.
This tech stock still has a long way to go to recoup the massive losses it absorbed in the second half of 2021. Fortunately, Nuvei has exciting potential when we consider the industry it operates within.
Here’s why I’m excited about Nuvei’s future!
The way the average consumer pays for their goods in day-to-day life has experienced significant changes in the 21st century. Digital payments have eaten into cash since 2000. The COVID-19 pandemic accelerated that trend, as the shuttering of non-essential brick-and-mortar businesses forced many consumers to migrate to the digital space, at least temporarily. Cash is still king and made up more than half of point-of-sale transactions in North America and Europe in 2022. That said, digital payments continued to eat into that number.
Grand View Research recently estimated that the global payment processing solutions market was worth $47.6 billion in 2022. That is expected to deliver a compound annual growth rate (CAGR) of 14% from 2023 through to 2030. Investors should be jumping at the chance to get in on the digital payment revolution with this tech stock.
Should investors be happy with its recent earnings?
This company unveiled its fourth-quarter (Q4) and full-year fiscal 2022 earnings on March 8, 2023. In Q4 2022, Nuvei saw revenue increase 4% to $220 million. EBITDA stands for earnings before interest, taxes, depreciation, and amortization, and it aims to give a clearer picture of a company’s profitability. Nuvei saw adjusted EBITDA dip 6% to $85.7 million in Q4.
For the full year, Nuvei benefited from its aggressive global expansion. Total volume jumped 34% to $127 billion as e-commerce made up 89% of total volume. Nuvei posted revenue growth of 16% to $843 million. Moreover, adjusted EBITDA climbed 11% to $351 million. Some of the key business highlights in fiscal 2022 included the launching of direct acquiring capabilities in Australia. Moreover, Nuvei became a licensed in-country direct acquirer in Belgium for local card network Bancontact. The company also facilitated American Express’s entrance into the Canadian gaming market.
Nuvei: Should you buy this tech stock today?
This tech stock is trading in middling territory compared to its industry peers. However, Nuvei is geared up for big growth going forward in the tech space. Moreover, it boasts a fantastic balance sheet. I’m still very bullish on Nuvei for the long term, and I’m looking to stack shares as we kick off the 2023 spring season.
