Nuvei (NVEI) and OTEX: 2 TSX tech stocks to buy and hold amid selloff - Kalkine Media

Amid the ongoing tech stock selloff, investors might find TSX technology players like Nuvei Corp (TSX: NVEI) and Open Text (TSX: OTEX) undervalued, considering the rapid evolution in this sector.

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The technology space has been feeling more pressure than others because of rate hikes, with the S&P/ TSX Capped Information Technology Index falling by nearly 39 per cent year-to-date (YTD). 

However, one cannot deny the presence of technology in today’s world, including in business and personal lives. Considering the rapid evolution in the tech space, some investors may find these stocks undervalued (at their current prices).

On that note, let us talk about Nuvei and Open Text.

Nuvei Corp (TSX: NVEI)

Nuvei Corp said that its total volume jumped by 42 per cent year-on-year (YoY) to US$ 29.2 billion in Q1 FY2022. The payment tech provider saw its revenue grow 43 per cent YoY to C$ 214.5 million in the latest quarter.

The technology company recorded a net profit of US$ 4.5 million in Q1 2022 compared to US$ 27.8 million in the first quarter of 2021. However, its cash flow from operations grew by 23 per cent YoY to US$ 65.7 million in the latest quarter.

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Nuvei Corp also saw its free cash flow (FCF) swell by 36 per cent YoY to US$ 82.5 million in the first quarter of FY2022.

Stocks of Nuvei Corp plummeted by over 28 per cent in the last 52 weeks and were nearly 68 per cent down from its 52-week high of C$ 180 (September 17, 2021). NVEI’s Relative Strength Index (RSI) value stood at 28.14 when writing this.

Open Text Corporation (TSX: OTEX)

Open Text Corporation reported total revenues of US$ 882.3 million in Q3 FY2022, a YoY surge of 5.9 per cent. Its FCF increased to US$ 306 million in the latest quarter, marking a notable growth of 508 per cent YoY.

OTEX stock plunged by nearly 16 per cent in a year and fell by some 31 per cent from a one-year high of 69.79 (August 31, 2021). As per Refinitiv, OTEX’s RSI value was 31.93.

Bottomline

TSX tech stocks like Nuvei Corp and Open Text Corporation are currently available at much lower prices. For growth investors, these can help fetch larger gains as and when the tech sector recovers.

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Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.