Adyen share gains double digits according to numbers: Strong business in the second half of the year

The financial services provider Adyen has had a strong second half of the year. Also due to the booming online trade, sales and operating profit increased significantly. Our assessment of the Dutch stock. By Luca Bißmaier

The payment processor Adyen published the figures for the second half of 2021 on Wednesday. As announced by the Dutch, business has been very good over the past six months. Ebitda, i.e. the adjusted operating result, increased by 51 percent compared to the previous year to 357.3 million euros. According to the Reuters news agency, this result was above analysts' expectations. Sales also increased by 47 percent to EUR 556.6 million.

Adyen Latin America Chairman Davi Strazza explained that they have seen a clear trend towards online shopping as a result of the Covid pandemic. In addition to the shift to online business, they also saw a significant increase in contactless transactions. Supported by online trading, Adyen processed 300 billion euros for retailers in the second half of the year. This corresponds to an increase of 72 percent compared to the same period last year. Among other things, the financial service provider processes payments for the music streaming service Spotify or the online marketplace ebay. Adyen's modern payment infrastructure is connected to major card networks and local payment methods. From the payments made, the company keeps a small fee and also earns from risk hedging for customers.

Outlook and Goals

Adyen has not updated the forecast. In terms of revenue growth, the financial services provider aims to achieve a CAGR, i.e. a compound annual growth rate, in the mid-twenties to low-thirties. Adyen expects the Ebitda margin to rise to over 65 percent in the long term.

CEO Pieter van der Does has rejected major takeovers and mergers. "We have the ambition to build a global company ourselves without acquisitions," the manager said in an interview with Bloomberg.

Assessment on Adyen shares

Adyen benefits from online commerce as well as from retail payments. The financial service provider offers a variety of payment options. The targeted average sales growth of over 20 percent per year and the target margin of over 65 percent are ambitious targets. The margin target was almost reached at 63 percent in 2021.

JPMorgan analyst Sandeep Deshpande spoke of strong results despite the headwind that some competitors and customers from US online retail are currently feeling. Among other things, the US rival Paypal had disappointed with its latest report. The market estimates for Adyen could now increase for both the processed transaction volume and the operating margin.

The release of the results pleased investors on Wednesday. The Ayden share responded with a price increase of over 14 percent. In the past four weeks, however, the paper has recorded significant price losses. Despite today's increase, the paper is down more than ten percent. In the course of the sell-off, the price fell below our stop price. We therefore recommend monitoring the paper for the time being.

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