Eden still Red - but not for longLooking outside the crowded US tech space and more at longer term value compounders, Edenred ticks a lot of boxes and is worth both a fundamental and technical analysis.
Edenred represents a compelling opportunity for long term investors seeking exposure to the growing intersection of fintech, digital payments, and employee benefits. With a strong foothold in over 45 countries and a user base spanning over 60 million individuals, Edenred’s business model is rooted in high-margin, recurring revenues through solutions like meal vouchers, mobility cards, and digital corporate payments. Over the past three years, Edenred has delivered consistent double-digit revenue growth — up ~18% in 2022, 25% in 2023, and 17% in 2024 — signaling both strong execution and a robust underlying demand for its digital-first platform.
A conservative DCF model, based on a 12% revenue CAGR over the next five years, 25% free cash flow margins, an 8% discount rate, and a 2.5% terminal growth rate, yields an intrinsic value of ~€65 per share, well above its current market price of €27, offering an attractive 58% upside. This disconnect between Edenred’s fundamentals and its valuation is striking, especially given its inclusion in the CAC 40 index and exposure to secular tailwinds in digital transformation, remote work, and ESG-aligned employee welfare programs.
The TA of the chart doesn’t look great, the stock hasn’t recovered since the 2022 sell off. Yet the company continues to grow revenue and offers a highly attractive dividend yield. We are getting bullish divergences on the RSI and we are sitting at previous all time high resistance which appears to be support. The 5 wave move down may be over and should the US tech space sell off, I would expect money to flow into Europe and the safer dividend plays.
I’m keeping an eye on this, not financial advice.
