Although the broader market has soared amid the artificial intelligence (AI) boom, many stocks that were huge winners during the COVID-19 pandemic are still faltering. There may be no better example than Adyen (OTC: ADYEY). The payments giant is down 72% from its 2021 high, severely underperforming the market.
Investors are concerned about some slowing growth and a recent executive departure. However, if you look at the company’s financial performance, you’ll see it has created significant long-term value. Does that make this former market darling a buy in 2026?
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Management turnover and financial concerns
First, let’s talk about the bad. In early 2026, Adyen revised its revenue growth outlook for the year to a range of 20% to 22%, which was below its initial projections and analyst expectations of closer to the mid-20s. The revision led to a sharp drop in the stock price.
Then, in May, Adyen’s chief financial officer announced a surprise resignation. Although there was no reason to believe it was due to performance issues at the executive level, investors never like it when a key leader in a business unexpectedly departs. To pile on, Wall Street analysts downgraded Adyen stock in early June over concerns about pricing for enterprise clients in Europe.
Altogether, Adyen stock has fallen 42% year to date, with investors as pessimistic as perhaps they’ve ever been on this payments stock.
Image source: Getty Images.
Expanding product portfolio and addressable market
Adyen’s goal is to have the best payment processing capabilities, both online and offline, for enterprise retail clients. That’s the reason global restaurant chains and the likes of Uber and Spotify use its services to process what can amount to billions of payment transactions every year.
To expand the value it provides to these merchants, Adyen has made two acquisitions this year, of Talon One and Orb. Talon One uses software to give shoppers real-time incentives to drive more checkout volume, while Orb helps software enterprises optimize pricing and manage customer billing. Both can work in tandem to drive revenue growth for Adyen clients. Since Adyen earns a percentage of all payment volume processed through its systems, these acquisitions should accelerate revenue growth if they’re properly integrated into the businesses.
Investors may be worried about a deceleration in revenue growth, but concerns are overblown for anyone with a time horizon longer than one year. Net revenue rose 20% year over year in constant currency last quarter and has grown at a 37% annual rate since 2016 in U.S. dollar terms, making it one of the fastest-growing financial technology businesses in the world.
Because the business is much larger now, the days of 40% revenue growth are likely over for Adyen, but that doesn’t mean the business is falling apart. It is still taking market share from legacy systems that process online and in-person payments, and has a huge global addressable market with tens of trillions in payments processed by merchants every year.
By 2028, Adyen expects its EBITDA (earnings before interest, taxes, depreciation, and amortization) to reach 55% of revenue. This year, it expects revenue growth of 20% to 22%. Taking its $2.78 billion in revenue and increasing it by 20% annually during the next three years gets its top line to $4.8 billion, which would equate to $2.64 billion in EBITDA if it can meet its 55% margin target.
Right now, after the stock’s big decline, Adyen has a market cap of almost $30 billion using current exchange rates (Adyen is a Dutch company). That gives it a forward earnings ratio of just 11 compared with this 2028 EBITDA projection. If you want to buy Adyen stock today and hold for the next 10 years, now looks like a fantastic time to scoop up some shares of this payments giant.
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Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adyen, Spotify Technology, and Uber Technologies. The Motley Fool has a disclosure policy.
