Nuvei Stock Is on Fire This Year: Is it a Good Buy Today?

For investors looking for a prominent Canadian growth story, Nuvei stock has become a clear winner, but can the rally last?

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Nuvei (TSX:NVEI) is a prominent global fintech company that aims to accelerate and streamline payment processes with financial products. The scalable, flexible, and modular technology-based products allow companies to accept payments while enjoying card issuing benefits, banking, and fraud management services.

Despite surging to a high of more than $43 per share earlier this year, Nuvei stock has been weighed down by a number of factors. That said, the company has reported strong volume growth and is grabbing the attention of many growth investors in this current market.

So, the question is whether Nuvei stock can continue higher or if a continued decline is in store. Let’s dive in.

Strong Q3 performance and guidance raise

Canadian fintech Nuvei recently reported and published the results for the third quarter (Q3) in November 2023. Following the earnings report, Nuvei stock did continue higher, despite some mixed results.

The company’s total payment volume surged more than 70% to US$48.2 billion, an impressive number. Additionally, Nuvei reported a 20% increase in organic volume at constant currency. Also, this company’s earnings before interest, taxes, depreciation, and amortization grew at an impressive 36% pace to US$110.7 million.

With these results, management states that Nuvei foresees a consistent execution of annual margin expansion.

Dividend update worth sharing

Investors planning to earn from the upcoming dividend must make haste. This is because the company is planning to provide US$0.10 dividends on the ex-dividend date, which is one day before the closing business date for stocks.

It is important to keep in mind that Nuvei did not witness enough profits in the previous financial year. However, its growth in terms of revenue till last quarter reflects this company’s improving finances and its chances to provide dividends to new investors. 

Also, this will be the first year for Nuvei to provide dividends. Thus, investors will not have any historical data to track this company’s performance history yet. 

A massive global partnership worth considering

Nuvei announced a key partnership with Microsoft (NASDAQ:MSFT) on December 4, 2023. This is a significant milestone in this company’s journey to overcome the poor financial situation of the last month. With this collaboration, Nuvei aims to deliver an efficient payment user experience with its products, services, and solutions across key markets.

With Microsoft’s diverse reach, Nuvei payment systems will be able to penetrate markets in Africa and the Middle East. This company’s deep-rooted knowledge of local markets will help both companies streamline transactions like recurring bills and individual payments across Xbox and Office products. 

Can Nuvei stock continue to climb?

To conclude, the diversifying business and clientele of Nuvei bodes well for its stocks. Also, the company’s plan to provide dividends to investors and its improving finances set a positive image in investors’ minds for a buy. 

It is important to note that this company is still recovering from losses in previous years. This makes it somewhat risky. Therefore, I think it should be noted that only investors with a high-risk appetite should consider investing in NVEI stock right now. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nuvei. The Motley Fool recommends Microsoft. The Motley Fool has a disclosure policy.

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