RiverPark Advisors, an investment advisory firm and sponsor of the RiverPark family of mutual funds, released its “RiverPark Large Growth Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. During the third quarter, the markets performed strongly with the Russell 1000 Growth Index (RLG) and the S&P 500 index returning 3.19% and 5.89% respectively and RPX returning 3.73%. A weaker-than-expected jobs report that raised fears of a coming recession caused the RLG to drop 8.8% from the end of June to the fifth of August, giving the quarter a rocky start. As China passed a significant stimulus package and the Fed began its rate-cutting cycle with a 0.50% decrease to a goal of 4.75%-5.00%, those losses quickly reversed. In addition, please check the fund’s top five holdings to know its best picks in 2024.
RiverPark Large Growth Fund highlighted stocks like Adyen N.V. (OTC:ADYEY), in the third quarter 2024 investor letter. Adyen N.V. (OTC:ADYEY) is a payment platform company headquartered in Amsterdam, the Netherlands. The one-month return of Adyen N.V. (OTC:ADYEY) was 23.16%, and its shares gained 22.31% of their value over the last 52 weeks. On December 17, 2024, Adyen N.V. (OTC:ADYEY) stock closed at $15.72 per share with a market capitalization of $49.43 billion.
RiverPark Large Growth Fund stated the following regarding Adyen N.V. (OTC:ADYEY) in its Q3 2024 investor letter:
“Adyen N.V. (OTC:ADYEY): Adyen was a top contributor in the third quarter after reporting second quarter operating metrics that were largely in line with expectations, but better than investors feared. Transaction volumes grew 45%, (+46% expected), net revenue grew 26% (+26% expected), and net take rate was 0.147% (0.147% expected). Adyen’s three customer segments all delivered strong growth including Digital (brands that deliver products mostly online), which grew 49%, Unified Commerce (brands that include both a digital and physical footprint), which grew 28%, and Platforms (marketplaces like eBay), which grew 63%, up from 54% in the first quarter. From a geographical standpoint, net revenue growth accelerated versus the back half of 2023 in both EMEA (+25% v. +23%) and North America (+30% v. +27%). EBITDA margins of 46.3% were better than the 45.8% expected driven by slower hiring trends.
The company operates a global payments platform, integrating the full payments stack to serve modern global merchants. Unlike many of its legacy peers, Adyen’s roots are in technology designed specifically for multi-platform sellers. The company’s platform was fully built in-house on a single code base and operates as a single, integrated end-to-end network, giving it an advantage over competitors that have separate platforms for gateway, risk management, processing, issuing, acquiring and settlement. The company’s single platform also allows its merchant customers to use one payment service provider globally across all commerce channels (in-store, on the web, and on mobile devices), providing them lower payment costs, a single back end, a single contract and better visibility of end customers.”
We believe that the transition to next-generation, single-provider, omni-channel payment processing is in its infancy, and we believe the company will continue to take market share against its competitors. The company should have healthy revenue growth in the coming years as it rolls out more products and features, and we expect margins to expand as it leverages its fixed cost infrastructure.
A businessman at a smart POS terminal, demonstrating contactless payment methods.
Adyen N.V. (OTC:ADYEY) is not on our list of 31 Most Popular Stocks Among Hedge Funds. While we acknowledge the potential of Adyen N.V. (OTC:ADYEY) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.