Stripe Inc.
IPO Readiness Analysis

Stripe is not a payments processor — it is financial infrastructure. Its APIs are embedded in the core payment flows of Amazon, Ford, and OpenAI. Migration means rewriting financial plumbing, not cancelling a SaaS subscription. This switching cost dynamic is the foundation of the investment thesis.

The objective of this analysis was to determine a fair enterprise value for Stripe ahead of its anticipated IPO in late 2026 or H1 2027, and to assess whether the $159B private valuation represents a compelling entry point. The output is a formal investment memorandum with a blended three-method valuation and BUY recommendation.

The valuation blends three methods — weighted to reflect what the market will actually pay at IPO, not just intrinsic value in isolation. Comparable company analysis carries 60% weight as it answers the most relevant pre-IPO question: what does the market pay today for 26%+ growth infrastructure?

The DCF model spans 10 years of explicit free cash flow forecasts, anchored to Stripe's 2025A revenue of $7.6B and a 0.40% net take rate applied against $1.9T in total payment volume. WACC was set at 11.66% using a risk-free rate of 4.44% (US 10Y), beta of 1.30×, and Damodaran's equity risk premium of 5.55%. Terminal growth was held at 3.0%.

Seven peers across three cohorts were analysed — payments infrastructure (Adyen, Block, Payoneer), payment networks as moat benchmarks (Visa, Mastercard), and e-commerce platforms (Shopify, PayPal). An 18x EV/Revenue multiple was applied, reflecting Stripe's Rule of 40 score of 58% — ahead of Shopify at 47.3% and approaching Adyen at 67.3%.