On Wednesday, JPMorgan adjusted its stance on Nuvei Corp. (NASDAQ:NVEI) stock, changing the rating from Overweight to Neutral, while also raising the price target to $34.00 from the previous $32.00. The adjustment follows Nuvei's latest earnings report, which showed a mix of performance across different segments of the business.
Nuvei reported a 9% year-over-year increase in organic revenue volume, aligning with management's expectations. The Global Commerce segment experienced a 13% growth, marking a slight acceleration, while the B2B, Government, and ISV segments saw a 16% year-over-year increase, albeit with a 3-point deceleration. The Small and Medium Business (SMB) segment grew by 1%, with a 1-point deceleration from the previous quarter.
The company's revenue and gross profits surpassed both JPMorgan's and Street estimates. However, the adjusted EBITDA met expectations, influenced by a significant sequential increase in Selling, General, and Administrative (SG&A) expenses, which may include legal or deal-related fees.
In a notable strategic move, Nuvei's management has withdrawn its financial guidance for FY24 and beyond. Furthermore, the company has decided to discontinue hosting earnings calls. This decision comes in the context of a proposed take-private transaction by Advent, which is expected to be finalized either in late 2024 or early 2025.
The revised price target of $34.00 by JPMorgan correlates with the proposed acquisition price of Nuvei by Advent. This new target reflects the latest developments and the anticipated completion of the take-private deal within the specified timeframe.
InvestingPro Insights
As investors digest the implications of JPMorgan's updated stance on Nuvei Corp. (NASDAQ:NVEI), real-time data from InvestingPro provides additional context to the company's financial health and market performance. Nuvei's market capitalization stands at a solid $4.51 billion, suggesting a robust size within its sector. Despite the company not being profitable over the last twelve months, analysts predict a turnaround, expecting net income growth this year. This aligns with JPMorgan's positive adjustment of the price target to $34.00, which is also close to the current fair value estimates by analysts ($34.00) and InvestingPro ($44.22).
InvestingPro Tips indicate that while the stock has seen a strong return over the last three months, with a price total return of 24.9%, it is currently in overbought territory according to the Relative Strength Index (RSI). This suggests that the stock's recent price movements may have been too rapid and could be due for a correction. Moreover, the stock's price movements have been quite volatile, which could be a point of consideration for risk-averse investors. For those looking for more in-depth analysis, InvestingPro offers additional tips – there are 7 InvestingPro Tips available for Nuvei, providing a more comprehensive understanding of the stock's prospects.
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