SOURCES OF COMPETITIVE ADVANTAGE-MARKETING RESEARCH

RING ME UP A shopper uses her phone to access Adyen’s payment network.

FINTECH

Adyen 6 NETHERLANDS

(AS: ADYEN, $1,906)

Amsterdam-based Adyen has built a reputation as the go-to payments pro- vider for businesses that need to oper- ate globally, with customers ranging from McDonald’s to Microsoft to Uber. It can process payments using hundreds of meth- ods and currencies. Adyen uses its own payments infra- structure, combined with machine learn- ing, to minimize chargebacks and fraud. It processed about $284 billion worth of pay- ments in 2019, and experienced 23% growth in payment volumes in the first half of 2020 and a 27% increase in net revenue, despite the pandemic.

Square 9 U.S. (SQ, $196)

Square, which was once best known for its little white plug- in credit card swip- ers—as well as being Twitter CEO Jack Dorsey’s side hus- tle—has grown into a major force in pay- ments and banking in its own right. With a stock price that has tripled so far in 2020, Square’s mar- ket value has sur- passed that of Gold- man Sachs. What has investors so revved up? Likely its shiny new banking li- cense (approved in March) and its Cash App, a peer-to-peer payments and cryp- tocurrency-trading service whose rapid growth has made it a rival to PayPal’s Venmo. Next up: a possible acquisition of Credit Karma’s tax-preparation business.

PayPal 3 4 U.S. (PYPL , $193)

The former subsid- iary of eBay has defi- nitely come into its own in its past five years of indepen- dence. Poised to reap the benefits of consumers’ growing reliance on digital payments, PayPal has excelled during the coronavirus pan- demic, growing rev- enues nearly 20% in the first three quar- ters of the year— exceeding even its average three-year growth rate of 18%. Now one of the larg- est small-business lenders, PayPal is also expanding its offerings to include buying and selling cryptocurrency, both through its flagship product and its peer-to-peer payments app, Venmo.

Celltrion 4 9 SOUTH KOREA (KS: 068270, $266)

The pandemic has pushed South Korea’s Celltrion to further expand beyond its core business of making “biosimilars,” or cheaper generic versions of name-brand

“biologic” drugs and treatments. In Octo- ber, the U.S. Food and Drug Administra- tion granted emergency use authoriza- tion for Celltrion’s rapid COVID-19 testing kit, Sampinute, which promises to deliver results within 10 minutes and with a 94% sensitivity rate. The company is also de- veloping a COVID-19 antibody treatment, to reduce the severity of the coronavirus once patients are infected, and has re- ceived South Korean regulatory approval to begin Phase III clinical trials of the drug.

Facebook 5 0 U.S. (FB, $270)

Last but not least, the social media play- er’s underlying business remains strong. And new business opportunities con- tinue to emerge: A global e-commerce strategy (including WhatsApp Pay) shows signs of promise, for example. Analysts project 17% to 20% future, long-term growth. At the same time, reputational risk is high—as is the very real threat of regulatory crackdowns across different regions, including the United States. Per- haps even more ominous, the Facebook core product is seeing declining engage- ment levels with younger demographics. In short: There is a reason the social net- work is on this list, but also a reason it comes in at No. 50.

APPROACH

WITH

CAUTION

No company is problem-free, but some fly more red flags than others. From a big bet on COVID-19 drugs that may or may not pay off, to a booming business still plagued by misinformation, consider these two players high-risk, high-reward.

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