Adyen's Revenue Growth Target Too High, Loop Capital Says in New 'Hold' Rating

Loop Capital Markets has initiated coverage on Dutch payments firm Adyen with a Hold rating, arguing that the company's medium-term net revenue growth targets will likely need to be revised downward. The brokerage set a price target of €900 for Adyen's stock, implying roughly 5% upside from current levels, according to its initiation note.

Growth Forecasts Under Scrutiny

Loop Capital's primary concern is that consensus expectations for Adyen are too high. The payments processor, which handled nearly €1.4 trillion in volume in 2025, targets net revenue growth of around 20% in the medium term. However, the brokerage forecasts this growth will slow to a range of 17%-19% by 2028.

According to Loop Capital's managing director, Dominick Gabriele, this outlook is based on underlying trends in client growth and the fact that Adyen has already achieved 40% penetration of its most mature clients. The firm also believes Adyen lacks significant pricing power due to its focus on large enterprise merchants, which could lead to stable or slightly compressed take rates over time.

Impact on Margins and Earnings

This more conservative revenue forecast translates to slightly lower profitability estimates compared to the market consensus. Loop Capital's model projects Adyen's 2028 EBITDA margin at 55.4%, just below the consensus estimate of 56.1% and the company's target of above 55%. Consequently, the firm's 2028 earnings per share (EPS) estimate is about 3% below consensus.

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Key points from Loop Capital's analysis include:

• Slowing Wallet Share: Gains from existing clients are expected to slow from high single-digits to mid single-digits.
• Pricing Pressure: A focus on enterprise customers limits the ability to increase prices.
• Stock Volatility: The note flagged Adyen's history of sharp stock price drops following earnings, stating that over 50% of its reported results have led to a decline of more than 10%.

Outlook for Investors

Gabriele noted that the ongoing search for a new Chief Financial Officer presents an opportunity for the company to reset expectations. He suggested an incoming CFO should lower guidance "to set the company up for a beat raise cycle."

Loop Capital stated it could adopt a more positive stance on the stock under several conditions. These include a formal reduction in medium-term net revenue guidance to the mid-to-high-teens, a drop in consensus estimates below Loop's own forecasts, or the stock's valuation falling to a price-to-earnings multiple of 16.0x to 18.0x.