December 21, 2023
Top 10 Stock Adyen Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Adyen – Top 10 Stock in AEX Index
Adyen is listed as a top 10 stock on December 21, 2023 in the market index AEX because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 34 (34% performer), Obermatt assesses an overall hold recommendation for Adyen on December 21, 2023.
Snapshot: Obermatt Ranks
| Country | Netherlands |
| Industry | Data Processing & Outsourcing |
| Index | AEX, EURO STOXX 50, Sound Pay Europe |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Adyen Hold
| 360 METRICS | December 21, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 4 |
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| GROWTH | ||||||||
| GROWTH | 81 |
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| SAFETY | ||||||||
| SAFETY | 96 |
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| SENTIMENT | ||||||||
| SENTIMENT | 10 |
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| 360° VIEW | ||||||||
| 360° VIEW | 34 |
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ANALYSIS: With an Obermatt 360° View of 34 (better than 34% compared with alternatives), overall professional sentiment and financial characteristics for the stock Adyen are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Adyen. The consolidated Growth Rank has a good rank of 81, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. This means that growth is higher than for 81% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 96 which means that the company has a financing structure that is safer than 96% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 4 which means that the share price of Adyen is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 96% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 10, which means that professional investors are more pessimistic about the stock than for 90% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 34, Adyen is worse than 66% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 81), and the company is safely financed (Safety Rank of 96). However, professional market sentiment is low(Sentiment Rank of 10). The negative market view on Adyen may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Adyen compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one hundred minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the value rank is above 60. As market sentiment is low, you should be careful with paying more than market-average for this stock and conduct further research into the company’s future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Adyen negative
ANALYSIS: With an Obermatt Sentiment Rank of 10 (better than 10% compared with alternatives), overall professional sentiment and engagement for the stock Adyen is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Adyen. Analyst Opinions are at a rank of 27 (worse than 73% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 52, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in Adyen. But the Professional Investors rank is low at 25, which means that professional investors hold less stock in this company than in 75% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 11, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 89% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 10 (less encouraging than 90% compared with investment alternatives), Adyen has a reputation among professional investors that is far below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: Adyen Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 4 (worse than 96% compared with alternatives), Adyen shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Adyen. Price-to-Sales is 1 which means that the stock price compared with what market professionals expect for future profits is higher than 99% of comparable companies, indicating a low value concerning Adyen's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 8, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Adyen. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 5 and Dividend Yield, which is lower than 99% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 4, is a sell recommendation based on Adyen's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Adyen? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Adyen? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Adyen may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Adyen Growth Momentum high
| GROWTH METRICS | December 21, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 92 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 61 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 69 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 27 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 81 |
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ANALYSIS: With an Obermatt Growth Rank of 81 (better than 81% compared with alternatives) for 2023, Adyen shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Adyen. Sales Growth has a value of 92 which means that currently professionals expect the company to grow more than 92% of its competitors. Profit Growth with a value of 61 and Capital Growth with a rank of 69 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 27, which means that stock returns have recently been below 73% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 81, is a buy recommendation for growth and momentum investors. Adyen has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for Adyen, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. ...read more
Safety Strategy: Adyen Debt Financing Safety very solid
| SAFETY METRICS | December 21, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 87 |
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| REFINANCING | ||||||||
| REFINANCING | 42 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 100 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 96 |
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ANALYSIS: With an Obermatt Safety Rank of 96 (better than 96% compared with alternatives) for 2023, the company Adyen has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Adyen is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Adyen. Leverage is at a rank of 87, meaning the company has a below-average debt-to-equity ratio. It has less debt than 87% of its competitors. Liquidity is also good at a rank of 100, meaning the company generates more profit to service its debt than 100% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 42, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 58% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 96 (better than 96% compared with alternatives), Adyen has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Adyen. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Adyen Top Financial Performance
| COMBINED PERFORMANCE | December 21, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 4 |
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| GROWTH | ||||||||
| GROWTH | 81 |
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| SAFETY | ||||||||
| SAFETY | 100 |
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| COMBINED | ||||||||
| COMBINED | 76 |
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ANALYSIS: With an Obermatt Combined Rank of 76 (better than 76% compared with investment alternatives), Adyen (Data Processing & Outsourcing, Netherlands) shares have much better financial characteristics than comparable stocks. Shares of Adyen are low in value (priced high) with a consolidated Value Rank of 4 (worse than 96% of alternatives). But they show above-average growth (Growth Rank of 81) and are safely financed (Safety Rank of 96, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 76, is a strong buy recommendation based on Adyen's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Adyen exhibits low value (Obermatt Value Rank of 4), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 81). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 96) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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