In the last few years, the fintech space has disrupted the global payments and processing industry. The COVID-19 pandemic has accelerated this pace as several businesses have leveraged technology to stay relevant amid economic lockdowns.
Here, we take a look at three stocks part of the fintech universe that should be on your radar for 2021 and beyond.
Nuvei (TSX:NVEI) is the first stock on this list. The company is Canada’s first non-bank electronic payment processor. NVEI has grown its top-line at a fast clip via acquisitions. In 2018, it acquired the U.K.-based SafeCharge for US$890 million which allowed the company to double its top line.
Last year, it acquired Netherlands-based Smart2Pay for US$300 million giving it access to 13 international markets in Europe. Nuvei processes close to US$35 billion in annual transactions generating sales north of $350 million.
According to Bay Street estimates, Nuvei is well poised to increase sales by 27.5% to $458 million in 2021. The stock went public in September 2020 and has since surged over 45% in less than six months.
In Q4, the company’s total gross transaction volume was between $13.8 billion and $14.1 billion, which was a year-over-year growth of 50%. Sales were up 40% while adjusted EBITDA soared 50% as well.
Another high-growth tech stock that has crushed broader market returns since its IPO in March 2019 is Lightspeed (TSX:LSPD). The shares of this Canada-based company have more than doubled in the last year and LSPD ended 2020 with a customer base of 115,000.
In its latest quarter, Lightspeed sales rose 79% year over year to US$57.6 million. After considering the incremental sales due to acquisitions, top-line growth stood at a healthy 50%. Lightspeed managed to post revenue higher than its previous guidance that stood between US$44 million and US$47 million.
LSPD generated a significant amount of sales from software and payments. In the last quarter, this vertical accounted for 91% of total revenue. The company is also improving its bottom line as it reported an EBITDA loss of US$6.6 million which was 11.5% of its total sales. In the prior-year period, Lightspeed’s EBITDA loss was US$5.2 million, or 16% of total sales.
The final stock on my list is US-based Euronet Worldwide. This company is a transaction processor and offers ATM (automated teller machine), card outsourcing, and point-of-sale services.
In July 2015, Euronet acquired XE and HiFX and merged the two firms in 2018. The XE money transfer review is quite positive and it seems Euronet has successfully integrated the two companies.
Shares of the company have risen by 121% in the last five years. However, the stock is still trading 10% below its record high. Euronet stock is valued at a market cap of $8 billion, which means it’s trading at a forward price to sales multiple of 2.8 and a reasonable price to earnings multiple of 27.5.
Wall Street expects the company to increase its sales by 17.5% to $2.92 billion in 2021 and by 16.9% to $3.41 billion in 2022. Comparatively, its earnings are forecast to rise by 99.3% in 2021 and by 45.7% in 2022.