Shares of Adyen NV (ADYEY), the Dutch payments processing company, fell to a 3-1/4 year low today and have plunged more than -46% since reporting disappointing first-half revenue growth last Thursday. Despite the plunge in Adyen over the past week, the stock still looks expensive when compared to rivals like PayPal Holdings (PYPL), making many investors wary of buying the stock anytime soon.
The valuation of Adyen remains elevated even with the current slump in its share price. Adyen trades at 33 times forward earnings, well above the 19 times average among payment companies in a Bloomberg Intelligence index. Meanwhile, Worldline SA (WWLNF) and PayPal Holdings both have valuations below 12 times forward earnings. Mirabaud & Cie SA said, “We believe Adyen is a dead money investment over the next couple of months,” and we recommend waiting for the company’s next earnings results to see if there’s a good opportunity to buy the shares.
