Is Adyen Stock a Buy After 72% Plunge?
💡 Key Takeaway
Adyen's 72% drop and low valuation (11x forward EBITDA) make it appealing for long-term investors, despite near-term headwinds.
What Happened?
Adyen (ADYEY) has seen its stock plunge 72% from its 2021 high, severely underperforming the broader market. The decline accelerated in early 2026 when the company revised its revenue growth outlook to 20-22%, below analyst expectations of mid-20% growth.
Adding to the gloom, Adyen's CFO resigned unexpectedly in May, triggering further investor concern. Wall Street analysts downgraded the stock in June over pricing worries for enterprise clients in Europe. Year to date, the stock is down 42%.
Despite these headwinds, Adyen continues to gain market share in payment processing for major enterprises like Uber and Spotify. The company made two acquisitions this year—Talon One and Orb—to expand its product suite and drive future growth.
Long-term financials remain strong: net revenue grew 20% year over year last quarter and has compounded at 37% annually since 2016. Adyen targets 55% EBITDA margins by 2028, implying significant operating leverage.
Why It Matters
Adyen's dramatic stock decline has pushed its valuation to just 11 times projected 2028 EBITDA, a level that suggests excessive pessimism. For a company with a dominant position in enterprise payment processing and a massive addressable market (trillions in annual payment volume), this could be a bargain.
The acquisitions of Talon One and Orb enhance Adyen's value proposition, helping merchants drive checkout volume and optimize billing. If successful, these should accelerate revenue growth and expand margins.
While near-term growth has decelerated, the company's long-term track record (37% annual revenue growth since 2016) and rising profitability targets indicate the market is overreacting. For patient investors, the current price offers a compelling entry point.
Source: The Motley Fool
Analysis generated by Bobby AI quantitative model, reviewed and edited by our research team. This is not financial advice. Always do your own research before making investment decisions.
Bobby Insight
Adyen is a buy for long-term investors.
The 72% decline has created a compelling valuation at 11x forward EBITDA, while the company's core business remains strong with 20% revenue growth and strategic acquisitions. Near-term risks are overblown, and the long-term margin target of 55% provides a clear path to profitability.
What This Means for Me
