Shares in Dutch payments processor Adyen, a rival to Stripe, hit their lowest level in more than three years today, adding to yesterday's record loss after weak earnings raised concerns about its valuations and a price war grew.
The company's shares fell nearly 40% yesterday.
The Adyen share plunge "was because expectations were much higher. Analysts believed that Adyen would take significantly more share in this difficult market environment," said Jefferies equity analyst Hannes Leitner.
According to Refinitiv Datastream, Adyen was at an enterprise value of 43 times its 12-month core earnings based on yesterday's closing price and the latest earnings release.
That compares with 12.7 times for French rival Worldline and 8.8 times for Italy's Nexi.
Adyen reported earnings that missed expectations, a rare slip since it went public in 2018. Competition from North America, where rivals cut prices, slowed its revenue growth and hiring costs hit margins.
While that sparked the initial fall in its stock price, the selling gathered momentum as the session wore on, wiping €17.8 billion off Adyen's market capitalisation by the close.
Nexi and Worldline shares were caught in the fallout yesterday but were more resilient, each dropping around 3.5%.
Investors were already getting cold feet about Adyen's sector which has been buffeted by higher interest rates.
Total fintech funding in the EMEA region was $11 billion in the first half of the year, less than half the $27 billion seen in the second half of 2022, according to KPMG.
Privately held rival Stripe raised funds in March at a valuation nearly 50% lower than two years earlier.
Despite stretched valuations, analysts were bullish on Adyen.
According to data from Refinitiv, 17 analysts rated Adyen "buy", 12 "hold", and 4 "sell" before the earnings announcement.
CEO Pieter van der Does remained confident. "We run at the lowest cost, so we could join the price fight, but we don't think that’s the right strategy," he said in a post-earnings call with analysts.
