Checking in With Payment Stocks – PayPal, Adyen, & Block

May 10. 2022. 6 mins read

The efficient market hypothesis tells us that a stock’s intrinsic value cannot suddenly increase without reason. When the reason is clearly hype, investors might be served to do the unthinkable – engage in a bit of market timing and take some profits. That’s what we did with shares of Desktop Metal (DM) back when we held that firm. Conversely, when shares of a company drop sharply alongside the entire market, they may have become too richly priced over time. Stocks go up the escalator and down the elevator, as they say. If those stocks happen to represent quality companies, then investors can obtain growth assets at a significant discount. Today, pretty much all growth stocks are trading at steep discounts, including the big three payment companies.

The Performance of Payment Stocks

One fintech trend receiving loads of attention is payments, a thesis we wrote about in a late 2020 piece titled Square Stock vs. PayPal Stock vs. Adyen Stock. Here’s how these three firms have performed since that piece was published on October 14th, 2020:

  • PayPal (PYPL) -60%
  • Square Block (SQ) -55%
  • Adyen (ADYEN.AS) -1

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