Mobile Payments Processor Service Adyen Takes KBW Outperform Rating

July 26, 2018         By: Steven Anderson

Recently, there’s been a lot of kerfuffle over what payment services will be accepted at eBay. For a while, it was beginning to look like eBay was about to throw over PayPal and instead replace it with Adyen. Though eBay did change its stance on PayPal, there was nothing to suggest that Adyen wouldn’t be coming in as the primary payments system for eBay within the next  couple of years. Keefe, Bruyette and Woods (KBW) recently tipped us off about its stance on Adyen, and it comes down to one word: outperform.

Essentially, KBW believes that Adyen is such a top-notch operation that it deserves a higher valuation than the one the market has already put on it. It’s already been spotted working with some of the biggest names around, from Netflix to Etsy to Facebook and beyond. That’s no mean collection of clients, and it’s pulled in that impressive list thanks to its “seamless” payments provision operations.

Some have looked at KBW’s recommendation here askance, noting that the company’s already pretty heavily valued. But KBW responds to those perceptions by noting that Adyen provides “a unique service to merchants that is very difficult to replicate.” Plus, it’s also got a lot of room to grow; KBW is estimating growth of 45 percent for the rest of 2018, and in 2019 and 2020, 40 percent each.

That’s a pretty high bar, and with that kind of possible valuation at stake, Adyen may not enjoy “difficult to replicate” status for long before competitors jump in and provide similar services. KBW acknowledges that that is a risk, but notes that even as Adyen’s competitors come on line, Adyen has first-mover advantage, and can diversify its operations accordingly.

With Adyen’s array of connections, and its comparatively unique service in the field, it’s small wonder that KBW is putting a premium valuation on it. Of course, we also know that the mobile payments market is packed with competitors, and when it becomes clear that there’s a fairly wide-open portion of that market, it will likely be swarming with other firms before too much longer.

There’s too much opportunity in Adyen’s sector for it to stay unchallenged for long. For right now, though, it’s looking like a pretty good time to be Adyen.