ADYEY - Adyen: Up 74% But Still A Buy
2024-02-01 11:01:38 ET
Summary
- Adyen is a world leader in payments technology, offering an integrated platform that greatly simplifies the payments stack for global merchants.
- The shift from cash to card and digital payments presents a growth opportunity for Adyen and the entire payments industry.
- Adyen's costs growth will slow, allowing revenue growth to overtake cost growth again in the coming periods, returning margins to their previous levels.
Investment Case
From a standing start, Adyen ( ADYEY ) has become a world leader in payments technology. The company has taken on global giants and has been able to take meaningful market share by offering an integrated platform that simplifies relationships and tech stacks, allowing merchants to focus on running their businesses, allowing Adyen's platform to do most of the heavy lifting in transaction processing.
My investment thesis has 4 components:
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Adyen will continue to take market share leading to revenue growth;
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The shift from cash to card and digital payments will grow the entire payments industry, further growing revenues for Adyen;
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Adyen's fixed cost base will enable operating leverage, meaning profits will grow at a faster rate than revenue; and
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Adyen's existing customer base will continue to be a major contributor to growth.