Nuvei (TSX: NVEI)(NASDAQ: NVEI) stock staged a sudden rally in the last week. At writing, Nuvei stock trades for $67.86 per share, and it is up by 20.04% from its March 7, 2022, levels in just one week of trading. The sudden surge in its valuation on the stock market has allowed Nuvei stock to bring down its year-to-date losses to 16.32%, as the tech meltdown continues.
Today, I will take a closer look at the high-growth stock to help you determine whether the battered tech stock could make a worthwhile addition to your self-directed investment portfolio.
What caused the sudden surge?
March 8 marked the day Nuvei stock exhibited sudden growth in its valuation on the TSX. Nuvei announced its final quarterly earnings report for fiscal 2021 on March 8. The $9.69 billion market capitalization payments processing company posted phenomenal figures in its earnings report.
The company’s year-over-year revenues rose by over 80%, hitting the US$212 million mark and exceeding analyst estimates by a country mile. The growing e-commerce industry accounted for almost 90% of its revenues in the fourth quarter. The demand for its services has significantly increased in the e-commerce industry, resulting in greater revenue growth through that segment.
Nuvei stock’s adjusted earnings rose by 42.4% in the December-ending quarter to hit US$0.47 per share. The complete picture for fiscal 2021 shows that the company’s total volume increased by 121% from the previous year. The business has been expanding rapidly for Nuvei, and hitting the US$95.6 billion mark clearly highlights how well it is doing.
The company’s management also announced a strong outlook for its performance in 2022. The outlook comes as a result of significant profitability for the company. Nuvei stock’s adjusted EBITDA rose by 95% from fiscal 2020, hitting US$317 million in fiscal 2021.
All the positive news surrounding the company’s performance has inspired positive investor sentiment. It resulted in stock market investors flocking in droves to pick up its shares at discounted rates as the broader tech sector selloff continues. At writing, the buying spree appears to have slowed down, as its shares are down by 7.08% from March 9th levels.
Foolish takeaway
New York-based short-seller, Spruce Point Capital Management, published a negative report that made several accusations against Nuvei Corp. and its management. The broader tech industry was already struggling at the time, and the short-seller report triggered a significant selloff.
The recovery it has posted in the last few days of trading on the TSX is good. But Nuvei stock still trades for a 61.23% discount from its all-time highs in September 2021. The company has been putting up a stellar operational performance for the past several quarters, and it boasts a strong long-term growth outlook.
Rising geopolitical tensions and interest rate hikes could result in more volatility, translating to another potential dip in share prices for growth stocks across the board. Any dip in Nuvei stock’s valuation could warrant picking up its shares for profits over the long term.
