Adyen share price has collapsed: is it safe to buy the dip now?

Adyen (AMS: ADYEN) share price has not been left behind in the ongoing fintech sell-off. The stock plunged to a low of €604.2 and is at the lowest level since September 2019. It has dropped by more than 76% from the all-time high, giving it a market cap of over €20.2 billion.

It has been a bad week for fintech companies. On Tuesday, I wrote about CAB Payments, a London-listed company whose shares plunged by over 70%. The next day, Worldline shares crashed by over 50% after the fintech company warned about its slow growth.

Worldline’s turmoil spurred a major bear run among many fintech companies like Affirm, PayPal, and Block. In all, these companies have shed billions of dollars in value in the past few years as growth slowed.

Adyen’s stock crash accelerated after the company published weak financial results a few months ago. These results revealed that its processed volume in the first half of the year stood at €426 billion, up from €421 billion in H2’22. 

Its net revenue jumped by 21% to €739 million while its EBITDA plunged to €320 million. The company lamented that its growth was slowing because of higher inflation and interest rates in the United States and other markets. Also, it cited the ongoing cost optimisation by companies as it slashed its forward guidance. 

Adyen stock price has also tumbled as investors worry about future growth now that the biggest retailers have payment partners already. Also, after e-commerce boomed during the pandemic, future growth will likely moderate.

However, as I wrote in my recent report on PayPal, Adyen is still a good company that is transitioning from growth to value. Growth that we saw in the era of low interest rates will likely not return. Still, Adyen will continue generating stable results over time, making it a good investment. 

Adyen chart by TradingView

The daily chart revealed that the Adyen stock price collapsed hard in late August. It plunged to a low of €604.20 and has struggled moving below that since then. The shares have crashed below the 100-day and 50-day moving averages. They have also collapsed below the €1,145, the lowest level on June 16th.

Adyen’s volume has been quite high in the past few months despite the sluggish stock performance. Therefore, the outlook for the shares are neutral for now as investors wait for the company’s next earnings. I suspect that the shares will jump and retest the key resistance at €1,000.

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