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  5. NVEI: NVEI is down only 78% from its highs. [Nuvei Corporation Subordinate Voting Shares]
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Q: NVEI is down only 78% from its highs. Goldman came out this morning with this downgrade and commentary :


Nuvei downgraded to Neutral from Buy at Goldman Sachs Goldman Sachs analyst Will Nance downgraded Nuvei to Neutral from Buy with a price target of $40, down from $72. The analyst believes the company's revenue growth could be under pressure as a result of pressure on its crypto sales given the decline in crypto prices activity. In addition, softening economic trends will weigh on Nuvei's "largely discretionary verticals" of online gaming, currency trading, sports betting, and crypto trading, Nance tells investors in a research note. In addition, continued currency headwinds "could be an incremental drag on back half of the year revenues," says the analyst.

Their target is $US so the Cdn target is approx $52.

Do you have any comments on the points of the downgrade or are you in agreement with all said. And if so should we sell what is left before it goes to Zero/

Thanks


Sheldon

Asked by Sheldon on July 15, 2022
5i Research Answer:

The points made are certainly valid possibilities. For many stocks, there is right now a 'perfect storm' of negativity. But, that is why they are cheap: NVEI is debt free, with excess cash, and trades at 14X earnings. Consensus calls for 25% growth in the next year, despite the headwinds. The stock is by no means risk-free, but cash flow is good, and the noted target price would still be a 30% return if achieved. We firmly believe the company will survive until the market pivots or interest rates peak, and stock returns could be much higher in that scenario. We don't like to pick on individual analysts, but we do have to note that the analysts' prior calls on the stock have not exactly been in the accurate camp.