Shares of Adyen (OTC: ADYE.Y) collapsed as much as 44% this week, according to data provided by S&P Global Market Intelligence. The Dutch payments processor posted slowing sales growth and compressing earnings before interest, taxes, depreciation, and amortization (EBITDA) margins for the first half of 2023, which caused investors to reevaluate their positions. As of this writing, Adyen stock is down 28.6% year to date (YTD).

If you just looked at the highlights in a vacuum, you'd think Adyen had a strong first half of 2023. Payments volume grew 23% year over year to 426 billion euros, revenue grew 21% year over year to 739 million euros, and the company generated 323 million euros in EBITDA. What's not to like?

But with some context, you can see why Adyen shares cratered this week. EBITDA was actually down 10% year over year with a margin of just 43%. Margins have compressed in recent quarters and are now significantly below management's long-term guidance of 65%. Yes, the company has a good excuse for this, as it just hired a bunch of engineers to take advantage of all the layoffs, but it looks like investors are skeptical regardless. Revenue growth has slowed considerably during the last few years. For example, in the first half of 2021, Adyen's revenue grew 46% year over year. 

Continue reading

Source Fool.com