It has been hard work to find big movers in the Canadian technology sector since the COVID-19 pandemic began winding down in 2022. Top tech stocks like Shopify lost their lustre in a big way while the cryptocurrency space has failed to regain momentum. Today, I want to discuss why I’m still steering clear of Bitcoin, and I have another exciting tech stock still on my radar. Let’s jump in!
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Why I’m not betting on Bitcoin in 2023
Bitcoin was trading just above the US$24,000 mark at the time of this writing. The world’s top digital currency has managed to recoup some of its losses that saw it bottom out in November 2022. However, it is a long way from the highs it reached in November 2021.
Canada was the first country to launch an official Bitcoin focused exchange-traded fund (ETF). Purpose Bitcoin ETF (TSX: BTCC.B) started red hot after its launch. However, it has floundered in the months and years since it was introduced in the winter of 2021. Shares of this Bitcoin-focused ETF have dropped 10% month over month. Meanwhile, the ETF is still up 44% so far in 2023.
Here’s why investors should get in on payment processors in the tech space…
Digital transactions saw a massive uptick during the COVID-19 pandemic, particularly in the online retail space. Beyond that, younger consumers are steadily moving away from cash. That should inspire Canadian investors to look to payment processors on the cutting edge.
Market.Us, a top market researcher, recently valued the global payment processing solutions market at US$65.6 billion in 2022. The same report projected that this market would grow to US$198 billion by 2032. That would represent a compound annual growth rate (CAGR) of 12% over the forecast period.
How has this fintech stock performed over the past year?
Nuvei (TSX: NVEI) is a Montreal-based company that provides payment technology solutions to merchants and partners in North America, Europe, and around the world. Shares of this tech stock have dropped 14% month over month as of early afternoon trading on June 15. However, the fintech stock is still up 12% in the year-to-date period. Canadian investors can see more of its recent performance with the interactive price chart below.
This company unveiled its first-quarter fiscal 2023 earnings on May 10. It delivered total volume growth of 45% to $42.4 billion. Meanwhile, revenue climbed 20% to $256 million. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) were reported at $96.3 million — up from $91.6 million in the first quarter of fiscal 2022.
Looking ahead, Nuvei is projecting total volume between $196 million and $202 million for the full year. Moreover, the company forecasts revenue between $1.22 billion and $1.26 billion in fiscal 2023. Nuvei also expects adjusted EBITDA in the range of $456 million and $477 million.
Is this stock worth buying today?
This tech stock is geared up for strong growth going forward. Despite its flawed balance sheet, I’m still excited about Nuvei’s potential for the long term.
