Shares of (AS:) plummeted over 12% after the company missed revenue expectations for the fiscal Q1 2024.

The Dutch payments firm reported a net revenue of €438.0 million, marking a 21% increase from the previous year, but short of market consensus by 1%.

Processed volume surged 46% year-over-year in the quarter to €297.8 billion, driven by increased transaction volumes from existing enterprise clients.

The company attributed its revenue growth primarily to strong performance in North America, its fastest-growing region, alongside the higher processing volumes.

Looking forward, Adyen expects annual revenue growth to persist at a rate between the low and high twenties percentage range through to 2026.

The company projected its capital expenditures will remain at up to 5% of total revenue.

“While results came a touch below expectations and likely causing some pressure at market open, we believe shares will recover given the miss was based on mix-shift towards larger enterprise merchants (accelerated over Q4), which suggests some incremental recovery in the lost volumes of 2023 due to pricing pressure,” analysts at Jefferies said in a note.

“Thus, we see any pullback today as an enhanced entry opportunity,” they added.

Meanwhile, analysts at Citi said they believe the latest print sets Adyen up well for the remainder of the year, “which we believe will be taken well by the market, particularly given
the recent share weakness and some investor caution.”

Analysts were extremely optimistic about Adyen ahead of its earnings release, with the company receiving several stock upgrades over the past four months.

In a recent note, analysts at Morgan Stanley upgraded Adyen to Overweight and lifted their target price from €1,205.00 to €1,850. The Wall Street giant said they are confident in the company’s near-term growth prospects and its ability “to compound in the mid-20's % longer term.”