On Thursday, Bernstein, a financial institution, maintained its positive stance on Adyen NV (AS:ADYEN:NA) (OTC: ADYYF), reiterating an Outperform rating and a price target of EUR 1,600.00.
Adyen's stock is currently valued at a 41x 2025 earnings per share (EPS) multiple, which reflects a price-to-earnings growth (PEG) ratio of 1.3x. This is considered favorable compared to its peers, which average around a 2x PEG ratio.
Bernstein's analysis suggests that Adyen's growth prospects are solid, with expectations of low 20s percentage revenue growth that can be sustained over time. The firm anticipates that recent sales investments by Adyen will soon begin to reflect positively in the company's financial performance. Moreover, Adyen's total cost of ownership (TCO) approach is gaining traction with customers, which could contribute to volume increases in the medium term.
The analyst also highlighted Adyen's strategic wins as potentially providing a boost to transaction volumes. This is seen as an extension of Adyen's successful strategy of acquiring and then expanding business with clients.
" Latam appears to be in the middle of a transition and those headwinds will start lapping at some point. Further, the competitive pressures appear to be easing," Bernstein analysts said.
Notably, PayPal (NASDAQ:PYPL)'s new CEO has emphasized profitable growth, which could lessen competition for Adyen in certain market segments. As the pace of hiring slows, Bernstein expects Adyen to experience margin expansion and robust EBITDA growth, projecting an adjusted EBITDA growth rate of approximately 30-35% in 2025.
Lastly, Bernstein downplayed concerns regarding the loss of Cash App volumes, considering them inconsequential to Adyen's revenue figures.
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