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Adyen Is a Fintech Monster Stock

By Taylor Carmichael – Sep 15, 2021 at 4:00PM

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This Dutch payments company is already a mega-cap and is still growing fast.

Over in Europe, Adyen (ADYE.Y -1.46%) has emerged as a $97 billion company in the payments space. It competes with PayPal Holdings (PYPL -4.93%) and privately held Stripe.

On this episode of The Five, Motley Fool contributors Jason Hall and Taylor Carmichael and analyst Auri Hughes introduce some of their favorite fintech stocks. Auri's favorite pick in this space is Adyen. This discussion was recorded live on Aug. 31.    

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Jason Hall: Auri, what's your favorite fintech stock right now?

Auri Hughes: My favorite fintech stock is a company called Adyen based in the Netherlands, and it is a monster. Essentially, it trades OTC, but you can get shares, but obviously, it's a European company. What they've done is they specialize in e-commerce, point of sale and mobile. What happens is if your business, usually you'll have different vendors for your different things regarding payments. So maybe e-commerce you're using one provider, and then point of sale you're using one provider. Well, Adyen has created their technology from the ground up so you could do everything with them. As you're scaling and as you're growing, if you're doing business in the U.S. or outside of U.S., Adyen covers all of those bases. They're growing really fast. They're about $100 billion valuation right now. They have 60 percent EBITDA margins, which is really insane. This is an asset-light business that's compounding. I think the revenue growth this last second half of the year was at least over 30 percent. It's a business that wants to be a lot larger. We're looking at the same opportunities as like a PayPal and a lot of those major players. I think we're definitely going to hear from these guys in the future, and they don't dilute shareholders a lot with their stock-based compensation. They're very shareholder-friendly and it's a founder-led business. It's probably my favorite player in the fintech space.

Taylor Carmichael owns shares of PayPal Holdings. The Motley Fool owns shares of and recommends Adyen N.V. and PayPal Holdings. The Motley Fool recommends Adyen and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool has a disclosure policy.

Stocks Mentioned

Adyen N.V. Stock Quote
Adyen N.V.
ADYE.Y
$15.54 (-1.46%) $0.23
PayPal Stock Quote
PayPal
PYPL
$74.66 (-4.93%) $-3.87

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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