ADYEY - Adyen Is A Buy (But I'm Not Buying)

2024-03-15 10:14:31 ET

Summary

• Adyen is a company focused on quality. It boasts an efficient platform, a high-grade customer base and excellent financial results.
• The company operates in the digital payments sector, which has significant room for growth.
• Shares price is quite unpredictable and heavily influenced by expectations and sector trends, resulting in high volatility.
• Other risks include short-term global economic uncertainty and long-term rationalization in the digital payments sector, plus high dependence on a few big customers.
• The company's characteristics make it unsuitable for many investors and various investment strategies.

Investment thesis

The choice of which recommendation I have to give to Adyen ( ADYYF ) in this analysis was tricky.

The financial data of the company is impressive, with fast-growing revenues over the last 10 years, and positive Net Income almost from the beginning.

The business model may not be revolutionary, but it's relatively disruptive and, above all, is well-structured and coherent, the current price, in my opinion, is at least decent.

Finally, the business can take advantage of the strong secular tailwind of its sector (digital payments) which despite the exponential growth of recent decades still has very large room for growth ahead....

For further details see: