Written by Vineet Kulkarni at The Motley Fool Canada
There are very few stocks of technological multi-baggers in Canada like there are south of the border. Canadian fintech company Nuvei (TSX: NVEI) entered this catalog this year. Notably, a $ 21.5 billion payment processor is in great shape after recently completing its listing anniversary late last month.
The Nuvei share notably outperformed the markets in 2021
Shopify holds the throne among the tech greats with a 5.350% return so far after its IPO in 2015. Trade at the speed of light has also created solid wealth for shareholders over the past few years. Since 2019, it has returned nearly 700%.
Nuvei is the latest of the three that went public in September of last year. Nuvei has priced its IPO at $ 26 and has returned 500% so far. If you had invested $ 1,000 in the Nuvei IPO last year, you would have racked up nearly $ 5,923 today.
Nuvei acts as a payment processor for companies spread across various verticals. From crypto platforms to travel and e-commerce websites to regulated online gaming, Nuvei values its total addressable market at over $ 13 trillion.
Nuvei earns its income by charging transaction fees to merchants. It also earns money through value added services such as analytics and information provided to traders.
Nuvei’s integrated platform enables traders to accept payments in more currencies in more markets. Even though it operates in the industry with no barriers to entry, competitors might remain at bay due to its expertise in complex verticals like online betting. In addition, its exposure to several verticals allows for long-term income and profit stability.
Operational and financial growth
As more shoppers have turned to online shopping since last year, payment processors like Nuvei have seen a significant increase in revenue contributions from their e-commerce verticals. Interestingly, the company’s management expects the momentum to continue and has given optimistic revenue forecasts for 2021.
Since 2017, Nuvei’s revenue has grown 52% compounded annually. It is certainly a good growth for a technological action. Notably, it has also been successful in keeping gross profit margins fairly stable over the years.
As previously stated, Nuvei sees its addressable market at $ 13.3 trillion. Of which it generates annual revenues of around US $ 700 million, indicating enormous potential for long-term growth. The company expects revenue to increase by 30% CAGR in the medium term.
He has been aggressive on the acquisition front in 2021. He has announced or completed the acquisitions of Mazooma, Simplex and Paymentez so far this year.
Investors can expect strong revenue growth driven by contributions from these purchases in the coming quarters. Additionally, we may see more such acquisitions in the near future, given Nuvei’s expanding track record.
At the end of the line
Driven by all of these positives, NVEI stock has risen 125% so far this year. The stock is certainly expensive and trades 31 times its 2021 earnings. It is currently trading at $ 154 and has fallen 15% from its all-time high last month. So although they appear overvalued, the bulls could retreat to this high-growth tech stock given the recent correction.
The post of $ 1,000 invested in Nuvei (TSX: NVEI) last year is worth as much today appeared first on The Motley Fool Canada.
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The Motley Fool owns stock and recommends Lightspeed POS Inc. and Shopify. The Motley Fool recommends Nuvei Corporation and recommends the following options: January 2023 long calls at $ 1,140 on Shopify and January 2023 short calls at $ 1,160 on Shopify. Foolish contributor Vineet Kulkarni has no position in the stocks mentioned.