One to watch: Nuvei, Apple and Stella Jones

An advanced “neural engine” in the M4 chip will enable AI-based functions. (Photo: 123RF)

What to do with Nuvei, Apple and Stella Jones titles? Here are some analyst recommendations that are likely to change prices soon. Note: the author may have a completely different opinion than the one expressed by the analysts.

Nuvei (NVEI, $44.65): Good start to 2024, privatization on track

Nuvei reported its first-quarter results with revenue beating expectations thanks to higher-than-expected volumes.

Organic growth excluding currencies was 9%, ahead of a comparable 7% in the fourth quarter and ahead of analysts’ expectations.

Nuvei is off to a strong start to 2024 with total volumes of $60.1 billion ($b), compared with an estimate of $57.1 billion and a forecast of $57 billion to $58 billion, said Scotiabank Financial analyst Kevin Krishnaratne.

The increase in volumes helped Nuvei beat revenue to $335.1 million, compared with analysts’ forecasts of $322 million to $330 million.

Global Commerce, which accounts for 57% of Nuve’s turnover, grew by 13% and B2B, 19% of turnover with an increase of +16%.

Gross margin increased 200 basis points year-over-year to ~81%, in line with analyst estimates.

Earnings before interest, taxes, depreciation and amortization (EBITDA) of about $115 million came close to the high end of estimates of $110 million to $116 million, with a margin of 34.3%. Against 37.5% in the previous year period.

Margins declined due to the dilutive impact of Till Payments.

In light of the proposed transaction with Advent, Nuvei is suspending its earnings conference calls and its practice of providing financial outlooks. As a result, it is withdrawing the previous financial targets set for 2024 in addition to its medium and long-term targets.

Kevin Krishnaratna’s forecast remains largely unchanged with 2024 adjusted EBITDA forecast of $497.4 million with a margin of 36.1%

The analyst notes that the company is pursuing several initiatives to improve its cost structure in the coming quarters, including synergies with Paya, company-wide operating cost savings and opportunities in artificial intelligence.

The analyst maintains his $34 price target on Nuvei shares, as well as his neutral rating and his sector-specific outperform forecast.

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