{"id":50578,"date":"2023-08-19T18:01:31","date_gmt":"2023-08-19T22:01:31","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/is-adyens-pain-paypals-gain\/"},"modified":"2023-08-19T18:01:34","modified_gmt":"2023-08-19T22:01:34","slug":"is-adyens-pain-paypals-gain","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=50578","title":{"rendered":"Is Adyen\u2019s pain PayPal\u2019s gain?"},"content":{"rendered":"
\n

Shares of payment-processor Adyen NV extended their massive selloff Friday amid continued concerns about competitive dynamics in the U.S. <\/p>\n

Adyen
\n ADYEY,
\n -2.64%<\/bg-quote><\/p>\n

ADYEN,
\n -2.94%<\/bg-quote>
\n on Thursday came up shy of volume and revenue expectations when it posted results for the first half of the year, with management flagging heightened competition, especially as customers focus more on their own bottom lines.<\/p>\n

\n

\u201cWe have seen increasing competitive pressure in North America, and that\u2019s, to my view, related to a higher interest-rate environment, [as] more companies are looking at the bottom line, and that\u2019s an environment in which they try to see if cheaper alternatives work,\u201d Chief Executive Pieter van der Does said on the company\u2019s earnings call Thursday. <\/p>\n

Adyen\u2019s U.S. shares shed 39% in Thursday\u2019s session and were off nearly 3% more in Friday afternoon action. <\/p>\n

See also<\/strong>: Adyen sees flurry of ratings moves after 39% price drop on Thursday<\/p>\n

Taking into account price action before earnings, Adyen shares logged their sixth session in a row of declines, marking their longest losing streak since Sept. 1, 2022, according to Dow Jones Market Data. They\u2019ve fallen more than 45% over that span to secure their worst six-day stretch on record. <\/p>\n

The Dutch processor now ranks eighth in the Netherlands by market capitalization. It stood at fifth as of Wednesday, before the latest report, according to Dow Jones Market Data.<\/p>\n

Mizuho analyst Dan Dolev saw van der Does\u2019 comments on competition as \u201ceuphemisms for pricing pressure,\u201d suggesting to him that rival PayPal Holdings Inc.\u2019s
\n PYPL,
\n +1.40%<\/bg-quote>
\n Braintree business is causing trouble for the Dutch processor.<\/p>\n

\u201cIn our view, Braintree\u2019s aggressive land-grab strategy proved successful amid\u00a0[Adyen\u2019s first-half] results,\u201d he wrote. \u201cIt likely contributed to the sharp deceleration in\u00a0Adyen\u2019s North America revenue growth.\u201d<\/p>\n

In his view, PayPal \u201cdeserves more credit for consistent growth and share gains at Braintree.\u201d <\/p>\n

Braintree may be a sore point now for Adyen investors, but it\u2019s a touchy subject for PayPal investors, too. PayPal appears to be gaining traction with Braintree, but the quicker growth of Braintree relative to PayPal\u2019s branded checkout business has caused margin pressure. <\/p>\n

Read<\/strong>: PayPal takes some steps forward, but here\u2019s what\u2019s holding the stock back<\/p>\n

Whether competitive trends ease is another issue. PayPal just named a new chief executive, so \u201cthe outlook for the Braintree strategy is uncertain,\u201d SVB MoffettNathanson analyst Lisa Ellis wrote Friday. <\/p>\n

\u201cOn balance, we believe the competitive pressure from PayPal\u2019s Braintree business is likely to begin moderating in 2024 (as PayPal is under intense pressure to improve the gross profits of the business),\u201d she continued. <\/p>\n

Don\u2019t miss<\/strong>: Elliott reveals it dumped its PayPal stake last quarter<\/p>\n

Bernstein\u2019s Harshita Rawat, meanwhile, wrote that U.S. e-commerce pressure \u201cis likely structural.\u201d <\/p>\n

\u201cIt is one of the most competitive acquiring markets globally with less need for sophistication, presence of 800-pound gorilla (Chase which enjoys attractive costs because of the issuing side) & likely new price aggressors such as Braintree,\u201d she wrote, noting that \u201cPayPal wants [total payment volume growth] & also has the button cost benefit.\u201d<\/p>\n

Adyen\u2019s latest earnings \u201creflected somewhat of a trade-off between volumes and pricing\u201d as the company showed an \u201cunwillingness to compete aggressively on pricing\u201d in North America, pressuring volumes but helping the company beat \u201cfor the first time in a while\u201d on its take rate, or the amount of money it retains through the economics of payment processing.<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Shares of payment-processor Adyen NV extended their massive selloff Friday amid continued concerns about competitive dynamics in the U.S. Adyen ADYEY, -2.64% ADYEN, -2.94% on Thursday came up shy of volume and revenue expectations when it posted results for the first half of the year, with management flagging heightened competition, especially as customers focus more […]<\/p>\n","protected":false},"author":1,"featured_media":50579,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-50578","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nIs Adyen\u2019s pain PayPal\u2019s gain? | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Shares of payment-processor Adyen NV extended their massive selloff Friday amid continued concerns about competitive dynamics in the U.S. Adyen ADYEY,\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=50578\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Is Adyen\u2019s pain PayPal\u2019s gain? 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