Digital Payment Expansion Will Unlock New Global Merchant Channels

Key Takeaways

• Comprehensive digital solutions and new value-added offerings are deepening existing client relationships and expanding revenue streams.
  
• Innovation, modular services, and merchant wins are driving operating leverage, supporting margin expansion and multi-year top-line growth.
  
• Adyen faces margin pressure from competitive, regulatory, and macroeconomic challenges, with its growth reliant on enterprise wins, wallet share gains, and successful product adoption.

Catalysts

Operates a payments platform in Europe, the Middle East, Africa, North America, the Asia Pacific, and Latin America.

• Strong expansion of share of wallet with existing customers, underpinned by demand for comprehensive digital payment solutions and new value-added modules (e.g. Adyen Uplift, Protect), is likely to drive sustained top-line growth and support higher net revenues in the coming years.
  
• The rapid growth in merchant wins and onboarding of new enterprise and vertical SaaS platforms-especially with the 2025 cohort outpacing prior years-significantly expands Adyen's future addressable base and transaction volumes, supporting multi-year revenue acceleration.
  
• Modularization and innovation (such as risk/fraud services, Intelligent Routing) enable differentiated, value-added pricing and higher take rates, which should support net margin expansion as operating leverage from scale continues to materialize.
  
• Ongoing investments and traction in next-generation financial products (e.g., card issuing, embedded platform financial services) deepen client relationships, raise average revenue per merchant, and create new earnings streams, positively impacting margins over the long term.
  
• Adyen's global platform and regulatory licenses position it to capitalize on secular growth in e-commerce, omnichannel retail, and alternative payment adoption, as merchants seek seamless international expansion and support, directly benefiting future transaction and revenue growth.

Adyen Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Adyen's revenue will grow by 21.3% annually over the next 3 years.
• Analysts are assuming Adyen's profit margins will remain the same at 45.5% over the next 3 years.
• Analysts expect earnings to reach €1.8 billion (and earnings per share of €55.09) by about September 2028, up from €996.5 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as €1.4 billion.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 37.1x on those 2028 earnings, down from 44.1x today. This future PE is greater than the current PE for the NL Diversified Financial industry at 7.3x.
• Analysts expect the number of shares outstanding to grow by 0.07% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 5.61%, as per the Simply Wall St company report.

Adyen Future Earnings Per Share Growth

Risks

• Exposure to macroeconomic headwinds, such as tariffs and currency volatility (e.g., APAC merchants trading into the US facing tariff impacts, strong euro/weak dollar), may continue to hamper regional transaction volumes and overall revenue growth unless offset by other regions or successful market expansion.
  
• Adyen's growth is highly dependent on ongoing share of wallet gains and large enterprise customer wins; any slowdown in merchant expansion, lower penetration within its existing customer base, or concentration risk (should key large customers reduce volumes or switch providers) could create revenue volatility and limit top-line growth.
  
• Competitive pressures-including commoditization of core payment services, increasing modularization, and margin compression-noted both from legacy incumbents and fintech disruptors, threaten to erode net margins and earnings over time despite Adyen's recent operating leverage improvements.
  
• Limited visibility into accelerating adoption and monetization of new and value-added products (e.g., modular services, Uplift, issuing, stablecoin capabilities) raises execution risks; if uptake is slower than projected, or if merchants demand core services for free or at lower pricing, revenue and net margin improvement may disappoint.
  
• Growing regulatory scrutiny, compliance demands (banking licenses across jurisdictions), and evolving risks around cybersecurity/fraud-as highlighted through merchant demand for lower fraud rates and ongoing investments-may increase operational costs, require sustained investment, and drag on earnings and margins over the long term.

Valuation

• The analysts have a consensus price target of €1812.874 for Adyen based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €2450.0, and the most bearish reporting a price target of just €1400.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €3.9 billion, earnings will come to €1.8 billion, and it would be trading on a PE ratio of 37.1x, assuming you use a discount rate of 5.6%.
• Given the current share price of €1394.4, the analyst price target of €1812.87 is 23.1% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.