Nuvei Corporation's (TSE:NVEI) Profit Outlook

By
Simply Wall St
Published
December 22, 2020

Nuvei Corporation (TSE:NVEI) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Nuvei Corporation provides payment technology solutions to merchants and partners in North America, Europe, the Asia Pacific, and Latin America. With the latest financial year loss of US$69m and a trailing-twelve-month loss of US$131m, the CA$10b market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Nuvei's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Nuvei

According to the 12 industry analysts covering Nuvei, the consensus is that breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of US$51m in 2021. The company is therefore projected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 85% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

TSX:NVEI Earnings Per Share Growth December 22nd 2020

Given this is a high-level overview, we won’t go into details of Nuvei's upcoming projects, but, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 8.6% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Nuvei which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Nuvei, take a look at Nuvei's company page on Simply Wall St. We've also compiled a list of important factors you should look at:

  1. Valuation: What is Nuvei worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Nuvei is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Nuvei’s board and the CEO’s background.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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