Adien(Otc: Adye.y) He was a huge user during the height of the Pandemia Coid-19. As with other pandemic users, this tail wind turned into a headache for the payment processor 2022 and 2023, causing the stock to drop as many as 75% from all weather tops. The shares have recovered a little, but they are still falling about 50% of the highlights from this writing in early February.
Unlike other pandemic high flyers who see their competitive advantages to erode, Adyen’s job is actually piercing well today and is ready to continue to grow in the coming years. Here’s why investors should consider buying a giant financial technology gigant before being announced on February 13th in the fourth quarter.
Payments are a monstrous and confusing industry. When transferring your card with a card or make an online payment, there may be a dozen services that will work on the authority and fulfillment of the transaction.
Adye’s founders aimed to improve these official services with a vertically integrated payment processor. Now it is one of the biggest players in the industry, but this philosophy still describes Adyen today. With a complete solution built from the foundation for modern internet payments, the success rate of Adyena’s payment is much higher than industrial peers, leading to the victory and happiness of customers.
Starting with network payments in Europe, Adyen has now expanded around the world and in almost any category of payment processing. He wants to be a one -place store for his paying partners, which are usually large platforms. For example, Spotics and Uber They both run with Adyen paying, which must be worse with some of the most complicated payments for payment in the world. 99.99% of the time, when you order Uber, the payment process is imperceptible, even in different countries. It is the beauty of Adyen’s modern payment processing software.
Adyen has started with a competitive advantage with its modern technology, but it will increasingly grow a new competitive advantage with Scale. Why? Because it can encourage prices lower than any competitor. In 2015, Adyen’s annual amount of payment was below $ 35 billion. In 2023 he processed more than three billion dollars of payment. As this is growing, the company will be able to lower prices, while still maintaining a high margin of profit, because of its structure of fixed costs and high incremental profit margins.
Another attractive Adyena quality is his culture of discipline. Maybe because its headquarters are far from the Silicon Valley, the company is much more disciplined than other Financial Technology players. This led the company to achieve EBITDA (Earnings before interest, tax, depreciation and depreciation) edge greater than 50% during pandemic flourishing.
However, on the Bear Bear market for the 2022 technological shares, Adyen’s profit margin began to decline. This was not due to the pandemic of the pandemic, but because of the opposite nature of Adyen administration, employment. When every other software company worked to employ freezing or release, Adyen expanded the number of employees to prepare for its global expansion. This temporarily overthrew Adyen’s EBITDA Marz, but he had already started recovering. The EBITDA Margin increased to 46% in the first half of 2024, compared to the first half of 2023.
In advance investments in the bears market, they helped Adyen take over a market share of competition, and that should be done in the future. Every year it processes a trillion of dollars of payment, and although it can be done with a huge number, Adyen is still pipsqueak in digital payments. There is a huge market that Adyen will start, and this is well placed to take advantage of the advantage.
With the Adyen business model of taking a small slice of each payment processed through its systems, the company’s revenue will grow along with the growth of the volume of payment. The administration leads to at least 20% of the annual increase in revenue by 2026. I would bet that the double -digit revenue growth will continue even before 2026, as the annual volume of payment brings $ 2 trillion, $ 3 trillion, and eventually a lot more levels. More people around the world adopt digital payments, and inflation helps to raise the total market that can be addressed every year.
During the last 12 months of reported financial resources, Adyen has earned just over $ 2 billion in revenue. I believe that there is room for the company to double that revenue at $ 4 billion within a few years and eventually reached $ 10 billion, given how large the payment processing industry is. With guidelines for long -term EBITDA margas of 50%, Adyen could work $ 5 billion in the future EBITDA. Compared to a market limit of about $ 50 billion today, Adyen looks like durable trading of growth stocks at a reasonable price.
Now it looks like a good time like any for the purchase of some Adyen shares, just before reporting to the Q4 earnings on February 13th. Buy this section and hold it in the long run.
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Brett Schafer has positions in Spotify technology. Motley Fool has positions and recommends Adyen, Spotify Technology and Uber Technologies. Motley Fool has disclosure rules.
