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ASML Holding NV ADR ASML

Morningstar Rating
$939.50 −1.87 (0.20%)
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Company Report

ASML Earnings: Strong Bookings of EUR 9.2 Billion Indicate a Healthy 2025, but 2024 Looks Flat

Wide-moat ASML's quarterly results surprised investors as it recorded very strong bookings of EUR 9.2 billion, sending the shares up 6% intraday. This comes after weaker bookings during the first nine months of 2023 (EUR 10.9 billion cumulatively) as foundries moderated their tool orders given the overall macroeconomic slowdown. We expect healthy orders through 2024 due to: (1) strong fab openings expected in 2025 (Taiwan Semiconductor Manufacturing, Intel, and Samsung), and (2) strong demand from Chinese customers in anticipation of further export restriction controls. Revenue from China has seen a fourfold increase in the past two quarters and we expect Chinese demand will remain high through 2024 for the same reason. Revenue and EBIT grew 30% and 39%, respectively, to EUR 27.6 and EUR 9.0 billion for the full year. We expect only slight sales growth in 2024, in line with management’s comments, followed by double-digit growth of almost 20% in 2025, with revenue reaching EUR 34.2 billion compared with management’s guidance of EUR 30 billion to EUR 40 billion. We maintain our EUR 700 fair value estimate, with shares trading in EUR 750 territory after the Jan. 24 results, representing a 33 times enterprise value/EBIT (2023) multiple.

Price vs Fair Value

ASML is trading at a 25% premium.
Price
$939.50
Fair Value
$814.00
Uncertainty
High
1-Star Price
$2,792.90
5-Star Price
$543.00
Economic Moat
Gxsw
Capital Allocation
Vcsfstbms

Bulls Say, Bears Say

Bulls

ASML’s machines last more than 30 years, providing recurring service revenue. The switching costs and intangible assets required to displace these machines are enormous, with no competitor coming even close to ASML’s technological leadership

Bears

ASML sells a low-volume, high-price product. Lithography machines represent a high proportion of customer costs, so if the company fails to innovate customers will look for alternatives.

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News

Trading Information

Previous Close Price
$941.37
Day Range
$935.10943.50
52-Week Range
$564.00959.46
Bid/Ask
$939.80 / $947.19
Market Cap
$370.72 Bil
Volume/Avg
519,732 / 963,985

Key Statistics

Price/Earnings (Normalized)
43.49
Price/Sales
12.42
Dividend Yield (Trailing)
0.70%
Dividend Yield (Forward)
0.70%
Total Yield
0.96%

Company Profile

ASML is the leader in photolithography systems used in the manufacturing of semiconductors. Photolithography is the process in which a light source is used to expose circuit patterns from a photo mask onto a semiconductor wafer. The latest technological advances in this segment allow chipmakers to continually increase the number of transistors on the same area of silicon, with lithography historically representing a high portion of the cost of making cutting-edge chips. ASML outsources the manufacturing of most of its parts, acting like an assembler. ASML’s main clients are TSMC, Samsung, and Intel.
Sector
Technology
Industry
Semiconductor Equipment & Materials
Stock Style Box
Large Growth
Total Number of Employees
44,085

Competitors

Valuation

Metric
ASML
AMAT
LRCX
Price/Earnings (Normalized)
43.4924.5433.75
Price/Book Value
24.869.4314.73
Price/Sales
12.426.288.62
Price/Cash Flow
37.5720.9830.85
Price/Earnings
ASML
AMAT
LRCX

Financial Strength

Metric
ASML
AMAT
LRCX
Quick Ratio
0.881.771.95
Current Ratio
1.502.713.06
Interest Coverage
59.2224.6020.98
Quick Ratio
ASML
AMAT
LRCX

Profitability

Metric
ASML
AMAT
LRCX
Return on Assets (Normalized)
21.48%22.91%19.81%
Return on Equity (Normalized)
73.05%44.88%45.47%
Return on Invested Capital (Normalized)
52.22%30.44%28.12%
Return on Assets
ASML
AMAT
LRCX
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