A strong performer from today's morning trading session is ASML, whose shares rose 1.8% to $1780.58 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.
ASML's Valuation Is in Line With Its Sector Averages:
ASML Holding N.V. provides lithography solutions for the development, production, marketing, sales, upgrading, and servicing of advanced semiconductor equipment systems. The company belongs to the Technology sector, which has an average price to earnings (P/E) ratio of 30.44 and an average price to book (P/B) ratio of 4.19. In contrast, ASML has a trailing 12 month P/E ratio of 59.9 and a P/B ratio of 1588.8.
ASML's PEG ratio is 2.42, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
Wider Gross Margins Than the Industry Average of 36.97%:
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $13,978 | $18,611 | $21,173 | $27,558 | $28,263 | $32,667 |
| Gross Margins | 49% | 53% | 51% | 51% | 51% | 53% |
| Net Margins | 25% | 32% | 27% | 28% | 27% | 29% |
| Net Income (M) | $3,554 | $5,883 | $5,624 | $7,839 | $7,572 | $9,609 |
| Net Interest Expense (M) | $43 | $55 | $61 | $153 | $160 | $114 |
| Depreciation & Amort. (M) | $491 | $471 | $584 | $740 | $787 | $916 |
| Diluted Shares (M) | 419 | 410 | 398 | 394 | 394 | 389 |
| Earnings Per Share | $8.48 | $14.34 | $14.13 | $19.89 | $19.24 | $24.71 |
| EPS Growth | n/a | 69.1% | -1.46% | 40.76% | -3.27% | 28.43% |
| Free Cash Flow (M) | $3,666 | $9,945 | $7,205 | $3,288 | $9,099 | $11,085 |
| CAPEX (M) | $962 | $901 | $1,282 | $2,156 | $2,067 | $1,574 |
| Total Debt (M) | $4,663 | $4,075 | $3,514 | $4,632 | $3,677 | $2,709 |
| Net Debt / EBITDA | -0.31 | -0.4 | -0.53 | -0.24 | -0.92 | -0.84 |
| Current Ratio | 2.41 | 1.48 | 1.28 | 1.5 | 1.53 | 1.26 |
ASML benefits from rapidly growing revenues and increasing reinvestment in the business, generally positive cash flows, and wider gross margins than its peer group. The company's financial statements show a strong EPS growth trend and healthy leverage levels. Furthermore, ASML has just enough current assets to cover current liabilities, as shown by its current ratio of 1.26.
