Q: Hello 5i team,
There is such a difference in Nuvei’s adjusted and unadjusted financial results. On an adjusted basis it looks like an incredible growth at a VERY price story. Unadjusted with stock compensation doesn’t look close to the same. What are your thoughts on the adjusted and unadjusted results for this story?
Also, do you have any concerns about the adjusted fcf yield that is used to buy back shares that are issued at part of comp and adjusted out, effectively making the story less profitable?
Thank you!
There is such a difference in Nuvei’s adjusted and unadjusted financial results. On an adjusted basis it looks like an incredible growth at a VERY price story. Unadjusted with stock compensation doesn’t look close to the same. What are your thoughts on the adjusted and unadjusted results for this story?
Also, do you have any concerns about the adjusted fcf yield that is used to buy back shares that are issued at part of comp and adjusted out, effectively making the story less profitable?
Thank you!
5i Research Answer:
On this particular issue we don't have big concerns. For a fast-growing company, stock comp. always plays a big role in adjusted earnings. It needs to be looked at, but if looked at too critically then it is esseentially penalizing the company for growing, which isn't right either. Most companies do try and buyback shares to offset this compensation expense, and regarding the second half of this question we would still rather see this than just straight dilution from compensation. Trends need to be watched, but while the company is in 'fast growth' mode we are comfortable with its approach.