Adyen N.V. ( AMS:ADYEN ) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of ADYEN, it is a financially-healthy company with a great track record and an optimistic future outlook. Below is a brief commentary on these key aspects. If you're interested in understanding beyond my broad commentary, take a look at the report on Adyen here .
Flawless balance sheet with outstanding track record
One reason why investors are attracted to ADYEN is its earnings growth potential in the near future of 26% which is expected to flow into an impressive return on equity of 28% over the next couple of years. In the previous year, ADYEN has ramped up its bottom line by 84%, with its latest earnings level surpassing its average level over the last five years. This illustrates a strong track record, leading to a satisfying return on equity of 23%. which is what investors like to see!
ADYEN's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that ADYEN manages its cash and cost levels well, which is a key determinant of the company’s health. ADYEN currently has no debt on its balance sheet. This means it is running its business only on equity capital funding, which is rather impressive for a €20b market cap company. Investors’ risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.
For Adyen, there are three essential factors you should further examine:
- Valuation : What is ADYEN worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether ADYEN is currently mispriced by the market.
- Dividend Income vs Capital Gains : Does ADYEN return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from ADYEN as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ADYEN? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.