Is Darktrace stock price a better bet than Adyen and Nexi?

Rrecent entrants to the Adyen market [ADYEN.AS]dark trace [DARK.L] and Nexi [NEXI.MI] have all struggled over the past year as global tech stocks have fallen out of favor with investors. Fears about rising interest rates and weak consumer demand wiped out most of the growth in fintech and IT shares in 2021.

The fintech sector, in which both Ayden and Nexi operate, had a particularly difficult start to the year. Cathie Wood’s ARK Fintech Innovation ETF [ARKF] fell 66.2% in the past year to July 27. While the cybersecurity sector, in which Darktrace operates, has performed better than fintech, the First Trust Nasdaq Cybersecurity UCITS ETF [CIBR] is still down 15.7% compared to the previous year.

Shares of Italian bank Nexi, which focuses on creating payment solutions for businesses, have seen the sharpest fall against its peers, down 36.9% year-to-date. Meanwhile, Dutch payments company Adyen, which offers similar services, is down 27.6%. In contrast, the share price of cybersecurity firm Darktrace has fallen 15.8% this year.

Adyen sees 70% growth in payments

Although its share price has struggled in recent months, Adyen has posted impressive growth numbers over the past year. The company processed €516 billion in payments throughout 2021, representing a staggering 70% growth on 2020 figures.

The company, which provides end-to-end payment systems for companies like Uber [UBER]Spotify [SPOT] and Booking.com [BKNG], also saw strong earnings growth. Adjusted EBITDA for 2021 increased 57% in 2021 to €630 million as online consumer spending remained strong.

Adyen’s stock price sits in the middle of the pack when its 2022 performance is compared to Darktrace and Nexi. However, looking longer term, Adyen has posted the strongest performance since its IPO in the summer of 2018. The share price is up 318.2% since its IPO in June 2018, closing at €1,673 on July 27.

Of 19 analysts interviewed by The Wall Street Journal, 12 currently have a “buy” rating for the company, two “outperform” and the remaining five have a “hold” rating. These analysts’ average price target is €2,133, representing a 27.5% premium to Adyen’s July 27 share price.

Nexi share price falls on IPO

Italian fintech group Nexi has been around for decades in several different guises. Nexi, originally known as ICBPI, was founded in 1939 by six Italian cooperative banks. The company branched out into the payments industry through a series of acquisitions from 2006 to 2017. After rebranding itself as Nexi in 2017, the company went public in 2019. Since then, two mergers with the payment companies SIA and Nets have transformed the company into one of the largest in Europe. fintech groups.

However, since listing in 2019, Nexi’s stock price has gone nowhere. After hitting a high of €18.89 on July 29, 2021, the share price has since fallen back to its IPO price of €9, closing at €8.83 on July 27. Nexi significantly underperformed the likes of Darktrace and Adyen.

However, Nexi saw its revenues for 2021 increase by 10% compared to the previous year to reach 2.27 billion euros thanks to strong growth in card and digital payments in Italy and the rest of Europe. . EBITDA for the year grew by 12.1% to €1.09 billion.

Going forward, the company is likely to be hit by a decline in discretionary consumer spending as the cost of living crisis grips Europe. This will hurt payment volumes and possibly reduce revenue over the next few years. These fears may be partly responsible for the recent performance of Nexi’s share price.

Darktrace reverses July losses

The UK-listed cybersecurity company has seen its share price cut by more than half its value since October 2021. Darktrace shares hit a 52-week high of 1,003p in September last year before dropping dramatically to close at 353.70p on July 27 – a 63% decline. The share price suffered from ongoing litigation, as well as overvaluation fears.

However, since the start of the month, Darktrace’s share price is up 20.1%, reversing its losses since hitting a 52-week low of 281.3 pence on July 5. This was helped by a promising fourth-quarter business update on July 19, which revealed 32% year-over-year customer growth and a 48% increase in revenue. The company also gave strong guidance for 2023, with revenue growth of 29-32% expected for the full year.

With these good results and a lower valuation, analysts view Darktrace favorably. Of eight analysts interviewed by The Wall Street Journalsix rate it as a ‘buy’, one as a ‘hold’ and only one as a ‘sell’.

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