The Royal Bank says the backdrop behind consumer spending remains positive and believes Lightspeed’s Q1 2023 results offer an uptrend. (Photo: 123RF)
What to do with Nuvei, Lightspeed and Intact titles? Here are some analyst recommendations that prices are likely to move in the near future. Note: The author may have a completely different opinion than the one expressed.
Nuvei (NVEI, $31.92): Well positioned to take on the competition
Nuvei is well positioned to meet its strategic and financial goals, believes CIBC Capital Markets, but also to face its competitors, even those of larger size.
Aspirations to become a behemoth of innovation in the payments industry are evident, argues analyst Todd Coupland. He says it’s important to see how Nuvei stacks up against Adyen and Stripe. CIBC argues that despite its smaller size and lower brand awareness, the Quebec company is competitive with these two rivals. It holds its own in terms of platform technology, performance optimization, and scalability.
CIBC believes that Nuvei should be able to meet its target of 30% annual volume and revenue growth, as well as its long-term goal of a 50% increase in earnings before interest, taxes, and amortization (EBITDA).
In the short-term, ie 2022, the analysis of the web traffic of the financial institution’s competitors and customers suggests that it could be halted before the targets are met due to the appreciation of the US dollar against the euro. Todd Coupland recalls that 60% of the company’s revenue in the fourth quarter of 2022 came from Europe, Africa and the Middle East. He also adds that the decline in cryptocurrency will have an impact as 13% of revenue in 2021 will come from this sector.
These headwinds are causing CIBC to lower its revenue guidance for the third quarter to $221.4 million from $239.11 million, but also for the fourth from $278.46 million to $267.75 million adjust downwards. The financial institution also lowered its forecasts for earnings per share (-$0.12 and -$0.09) and EBITDA (-$10.9 million and -$6.1 million) for the two quarters.
CIBC cuts its price target on the stock to $70 from $80.
Lightspeed Commerce (LSPD, $18.79): Profitable multi-channel credit