Our target price is EUR2,200. We use a DCF basis to capture the value of Adyen's medium-term high-growth trajectory. Our DCF assumes a 10-year revenue CAGR of ~19%, terminal EBITDA margins of ~60%, terminal WACC of ~9%, and terminal growth rate of 3%.

Downside risks to our Buy thesis and target price include: 1) a further deterioration in the macro backdrop and discretionary spend/online retail; 2) increased competition, particularly relating to bundled offerings from key peers which could result in slower growth and more investment needed/lower margins; 3) sentiment risk and expectations given the stock’s high valuation multiples; and 4) possibility of technological obsolescence.