Adyen stock price and Graham value

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SECTOR: FAIL Adyen is in the Financial sector?, which is one sector that this methodology avoids. Technology and financial stocks were considered too risky to invest in when this methodology was published even decades ago. 

SALES: PASS The investor must select companies of "adequate size". This includes companies with annual sales greater than 260 million Euros. Adyen's revenue  2 billion current year, passes this test.

CURRENT RATIO: PASS FAIL The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. Adyen Current Assets EUR 9 551 / EUR 6 319 Current Liabilities = 1,5  is good but less than 2. 

LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS:  PASS Long-term debt must not exceed net current assets. Companies that meet this criterion display one of the attributes of a financially secure organization. Adyen has Current Assets of EUR 3 232 and Long-Term Debt is EUR 180 It easily passes this test. 

LONG-TERM EPS GROWTH: PASS Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. EPS for Adyen have increased 70-fold over the past 10 years. 

EARNINGS YIELD: FAIL The Earnings/Price (inverse P/E) %, based on the lesser of the current Earnings Yield or the Yield using average earnings over the last 3 fiscal years, must be "acceptable", which this methodology states is greater than 6,5%. Stocks with higher earnings yields are more defensive by nature. Adyen's E/P of 2% based on this year's earnings fails this test.

Graham Number value: FAIL The Price/Book ratio must also be reasonable. That is the Graham number value must be greater than the market price. Adyen has a Graham number of √(15 x €24 EPS x 1,5 x €115 Book Value) = €250 The stock price is EUR 1 300,-

DIVIDEND: Adyen does not pay a dividend. 

Note from 2023 "The company is growing in the US and has room for growth in Japan etc.  An interesting development in the USA is FedNow lowering payment costs and making payments instant. I don't know what that means for Adyen."

Sanity Check:

EUR 1 300 Stock Price / 15 (Price / Earnings Ratio) = EUR 86 EPS "needed" 3x today's earnings

Conclusion: Good balance sheet and growth. Not for the Graham Defensive investor at this price.