Adyen: Performance Meets Our Expectations, but Merchant Behavior Could Be a Curveball; Shares Cheap

Adyen reported a limited first-quarter business update, posting net revenue of EUR 534.7 million (up 22%) and volume growth of 6% (25% if we exclude one large client). The performance was in line with our expectations. Guidance was unchanged, although Adyen highlighted that the acceleration of net revenue growth this year may be hindered if tariff tensions weigh on consumer spending. It is important to note that Adyen grows primarily from signing up new merchants and taking share from competitors processing for the same merchants. This lowers its sensitivity around total market growth, but its fortunes are ultimately tied to the performance of its clients. We have lowered our near-term growth assumptions marginally but think the shares are attractive at current levels. Our fair value estimate is EUR 1,800 per share, down from EUR 1,950. Our Wide Economic Moat Rating and Exemplary Capital Allocation Rating are unchanged.