Adyen NV (DE:1N8) shares skyrocketed over 25% yesterday after the payments company posted stellar results for the second half of Fiscal 2023. Given the company’s improved sales and profitability, four analysts reiterated a Buy rating on Adyen stock, indicating their bullish stance on the company’s growth potential.
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Adyen is a Dutch-based global online payments company offering online payments, point of sale, marketplaces, and unified commerce. 1N8 shares have gained over 10% in the past year.
Adyen’s Impressive Results
Adyen’s revenues jumped 22% annually to €1.63 billion in 2023, majorly in line with expectations. The revenue growth was attributed to the consistent expansion of the company’s existing customer base and 26% growth in processed volume. Further, Adyen said that it significantly expanded its partnership with a digital client, which considerably added to its revenue growth in the period.
At the same time, EBITDA (earnings before interest tax depreciation and amortization) grew 2% year-over-year to €743 million, significantly higher than the consensus of €254.3 million. Adyen said it reduced hiring meaningfully in the second half of the fiscal year to contain costs.
For the six months ending December 31, 2023, net revenues soared 23% year-over-year, while EBITDA rose 13.7% compared to the same period last year. Processed volumes grew 29% year-over-year to €544.1 billion.
Adyen’s performance has been weighed down by macro issues, including high interest rates, persistent inflation, and sluggish customer spending. Even so, the company said that it has finished its hiring spree and is looking ahead to a revenue growth of low 20s on a constant currency basis in the near term.
What is the Prediction for Adyen?
Following the Q4 print, Jefferies analyst Hannes Leitner reiterated a Buy rating on 1N8 shares with a price target of €1,743 (21% upside). Leitner is impressed by Adyen’s mid-term execution and noted that its constant currency revenue growth was ahead of the company’s low 20s guidance for the current year. Further, the analyst highlighted the company’s ability to maintain its revenue growth while pursuing a disciplined approach to headcount expansion.
Additionally, TD Cowen analyst Bryan Bergin upgraded 1N8 stock to Buy from Hold, encouraged by the company’s improved results. With hiring concerns left behind, the analyst sees the possibility of higher profitability through 2026. He believes that “multiple levers” are poised to improve Adyen’s performance in the short and medium term.
Overall, with 11 Buys, four Holds, and one Sell recommendation, 1N8 stock has a Moderate Buy consensus rating on TipRanks. The Adyen NV share price forecast of €1,237.80 implies 14.1% downside potential from current levels.
