Does Adyen’s Recent Share Rally Signal a Shift in Value for 2025?

If you’re reading this, you’re probably asking yourself a familiar question: what should I actually do with Adyen stock right now? Whether you’re a fan of its payments innovations or just tracking how the fintech world is reshaping, Adyen has landed on many watchlists, and for good reason. Over the last week, shares have ticked up 5.6%, with a modest 5.8% rise over the past month, hinting at a fresh spark of optimism in the market. But zoom out a bit and you’ll see a more complex picture. Year to date, the stock has only climbed 2.0%, and the five-year track record is actually in negative territory at -12.7%. This turbulent mix of short-term gains and longer-term challenges suggests investors are still figuring out where Adyen fits as market conditions shift and competition heats up.

At its last close of €1,456, Adyen is getting glances both from bargain hunters and those skeptical of its growth story. According to our updated valuation checks, the company is classified as undervalued on only one of six measures, giving it a value score of 1 out of 6. So while some market watchers are chasing growth, the underlying valuation signals a need for deeper scrutiny.

So, is Adyen really a discount in disguise, or just priced for perfection? Let’s break down how different valuation approaches stack up for the stock. Stick around, because we’ll also look at an even more insightful way to cut through the noise at the end of this article.

Adyen scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Adyen Excess Returns Analysis

The Excess Returns valuation approach highlights how efficiently Adyen converts each euro of investor capital into profit above its cost of equity. This model focuses on the company’s ability to generate returns that exceed what investors could earn elsewhere at similar risk, which can be a strong signal of sustainable value creation.

For Adyen, the numbers are impressive at first glance. The company’s book value stands at €148.38 per share, with a projected stable EPS of €46.62 per share, based on a consensus of 12 analyst forecasts on future Return on Equity. The estimated cost of equity is €11.87 per share, so Adyen’s excess return amounts to €34.75 per share, based on an average Return on Equity of 21.69%. Projections from 11 analysts indicate the stable book value is expected to climb to €214.94 per share.

Despite these strong profitability signals, the model calculates an intrinsic value that is significantly below the current share price. The estimated value per share from this approach suggests that Adyen is trading at a 31.7% premium to its fair value. In simple terms, this points to the stock being overvalued based on its forecasted returns over and above the cost of equity.

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Adyen.

Our Excess Returns analysis suggests Adyen may be overvalued by 31.7%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Adyen Price vs Earnings

The Price-to-Earnings (PE) ratio is one of the most widely used and reliable tools for valuing profitable companies like Adyen, as it measures what investors are willing to pay for each euro of a company’s earnings. For firms delivering steady profits, especially in the tech and fintech space, the PE ratio provides a quick sense of market sentiment. High growth companies often command higher multiples due to expectations of future earnings expansion and lower perceived risk.

As of now, Adyen trades at a PE ratio of 46.0x. This is significantly higher than both the average of its direct peers (14.6x) and the broader diversified financial industry average (16.0x). On a surface level, such a premium might suggest the market is pricing in substantial growth or a market-leading position. However, to give more context, we use Simply Wall St’s proprietary “Fair Ratio,” a data-driven metric that adjusts for Adyen’s unique mix of growth profiles, profit margins, market risks, and overall industry trends. For Adyen, the Fair PE Ratio stands at 20.3x.

Unlike basic peer or industry comparisons, the Fair Ratio dives deeper, factoring in not just where Adyen sits relative to competitors, but also its forward earnings outlook, risk factors, and company size. This makes it a superior benchmark for evaluating whether the current valuation is justified. Comparing the Fair Ratio of 20.3x with Adyen’s actual PE of 46.0x, the stock appears meaningfully overvalued on this measure.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Adyen Narrative

Earlier we mentioned there is a smarter way to understand valuation, so let’s introduce you to Narratives. A Narrative is your personalised story and outlook about a company: the “why and how” behind your fair value, built from your own assumptions about future revenue, profits, and success factors. Instead of just relying on standard ratios or consensus targets, Narratives let you link what you believe about Adyen’s strategy, risks, and potential to a concrete financial forecast and resulting fair value.

Narratives are easy to create and compare on Simply Wall St’s Community page, where millions of investors post their unique perspectives on companies like Adyen. Investors use Narratives to check whether the current price looks attractive compared to their own fair value, helping them decide when to buy, hold, or sell. In addition, Narratives are dynamic, automatically updating your forecasts and fair values as new news or earnings are released, so your outlook stays in sync with the market environment.

For example, one investor might craft a Narrative with high future earnings estimates and see €2,450 as fair value, while another, more cautious investor settles on €1,400 based on different expectations. This shows how Narratives capture a spectrum of views and make decision-making more informed and personal.

Do you think there's more to the story for Adyen? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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