Adyen share price has risen in the last six straight weeks, moving to its highest level since July 2023. It has jumped by 150% from its lowest level in 2023, giving it a market cap of over €50 billion. So, is the Adyen stock price a good investment ahead of its earnings?
Growing fintech giant
Adyen is one of the biggest fintech companies in Europe. It is a money processing firm that helps companies accept money online and offline.
Adyen has increased the number of services over the years. For example, it provides financing to some of its customers, allows firms to send global payouts in real time, and issuing physical and virtual cards.
Adyen’s business has grown rapidly over the years as it signed some of the biggest companies globally to its ecosystem. Some of its top customers are firms like Uber, Mango, eBay, spotify, and McDonalds. These firms handle billions of dollars annually, some of which flows to Adyen.
Adyen operates in one of the biggest – and competitive – industries globally. For example, it competes with some of the top competitors being the likes of Stripe, Square, Airwallex, WorldPay, and PayPal.
Adyen’s business has continued to do well as it experienced double-digit growth rates. Its net revenue rose by 24% in the first half of the year to €913 million. Having such a growth rate is encouraging for a company that has been in business for almost 20 years.
The revenue growth happened as the firm processed over €619 billion, with its point-of-sale revenue jumping to €95.6 billion.
Read more: Adyen share price is rebounding: Is it the best Dutch stock to buy?
Margin growth and earnings ahead
Adyen also continued to expand its margins, with the closely-watched EBITDA margin moving to 46% in the first half of the year, from 43% a year earlier.
Most of its business growth is because of the growing share of online transactions, customer gains, and robust relationships with its existing customers.
Additionally, the firm has taken measures to grow its margins through cost reductions. For example, it has focused on reduced hiring, a move it hopes will make it a more profitable company in the future.
The next key catalyst for the Adyen stock price will be its earnings on February 13. These numbers will be crucial as they will provide more color about its growth and opportunities.
Analysts expect that its business did well during the fourth quarter. The revenue is expected to come in at €506 million, a 22% increase from the same period last year. Its annual revenue will be almost €2 billion.
Analysts note that Adyen stock price may keep rising for a while. It has a large market share, is growing its margins, and continues to attract more customers from around the world. The key risk is that the firm is facing substantial competition from other companies.
Adyen share price analysis
Adyen share price chart by TradingView
The weekly chart shows that the Adyen share price has done well in the past few months. It has moved close to the 50% Fibonacci Retracement level.
The stock has moved above the 50-week moving average. Most importantly, it has formed an inverse head and shoulders chart pattern, a highly popular bullish sign in the market. This pattern has a head, two shoulders, and a neckline. It has recently moved above the upper side of the neckline.
Therefore, the Adyen share price will likely continue rising as bulls target the key resistance point at €2,260, the 23.6% retracement point. A drop below the support at €1,200 will invalidate the bullish view.
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