News

Adyen Shares Surge on Positive Long-Range Outlook

1 Mins read

Shares of payment processing firm Adyen soared on Thursday as the company revealed a surprisingly positive long-range outlook. Despite still being below previous levels after a downbeat first-half report, Adyen’s stock jumped by 33%. In its latest update ahead of an investor presentation, the company announced that its revenue had increased by 22% in the third quarter, with processed volumes rising by 21%.

The growth rate mirrors the company’s performance in the first half, during which revenue rose by 21% alongside 23% growth in processed volumes. Adyen had previously cautioned about the profit-focused approach of digital businesses in North America, as well as struggles with talent acquisition.

In the third quarter alone, Adyen hired 175 new full-time employees, and the company plans to hire a similar number in the fourth quarter. However, there will be a scaling back of hiring next year. This strategic move to reduce expansion should help improve margins, as highlighted by analysts at Stifel. In the first half, Adyen hired a total of 550 people.

Furthermore, Adyen has set its sights on achieving annual revenue growth within the low to high 20% range until 2026. The company also aims to enhance its operating margins to over 50% by 2026.

Following the positive news, analysts at Wells Fargo upgraded Adyen from underweight to overweight in a double upgrade.

Previously, analysts expected Adyen to achieve approximately 20% revenue growth with EBITDA margins remaining below 50% for the foreseeable future due to pressure in the first half of 2023 and increased investments. However, with the new information provided by management regarding the path towards high-20% revenue growth through 2026 and the strength seen in the third quarter, analysts believe that Adyen is now well-positioned to succeed after diligently investing through a challenging period. This strategy has historically proven successful.

Adyen’s shares have experienced a 28% decline so far this year.

Related posts
News

Alaska Air Group Inc. to Acquire Hawaiian Airlines

1 Mins read
Alaska Air Group Inc. has recently announced its plan to acquire Hawaiian Airlines in a deal worth approximately $1.9 billion. The transaction…
News

The State of the U.S. Labor Market

2 Mins read
This week, all eyes will be on the U.S. labor market as the Federal Reserve’s December meeting approaches. The release of November…
News

Ceres Power Holdings Faces Revenue Setback

1 Mins read
Ceres Power Holdings, a leading fuel-cell technology company, experienced a sharp decline in its shares on Friday. The company announced that its…

Leave a Reply

Your email address will not be published. Required fields are marked *