10Y annualized return is
excellent
at 19.5% per year
ASML has met or exceeded earnings expectations in
most
recent quarters (9/10)
Strong Return on Equity
High Gross Profit Margin
Strong Net Profit Margin
Robust Operating Profit Margin
Low Debt Levels
Strong Interest Coverage
Strong Financial Performance
Significant Free Cash Flow
Innovative Product Pipeline
Growth Driven by AI and Advanced Technology
Long-Term Revenue Opportunities
High Price-to-Earnings Ratio
Elevated Price-to-Sales Ratio
Quick Ratio Below 1
China Business Normalization
Lumpy Order Intake
Geopolitical Risks
Capacity and Lead Time Concerns
ASML demonstrates strong business quality through solid financial performance and a commitment to innovation. The future looks promising with growth driven by AI and advanced technologies, though challenges such as geopolitical risks and order intake unpredictability could pose threats.
Analysis Date: January 29, 2025
Last Updated: March 11, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
ASML Holding N.V. is a company that makes machines used to produce tiny computer chips, which are essential for all electronic devices like smartphones and computers. They create advanced tools that help chipmakers print the tiny patterns on the chips, ensuring they work properly. ASML's technology is important for making faster and more powerful chips, and they offer support and services to help keep their machines running well. The company operates in many countries, including the Netherlands, the United States, and parts of Asia.
Streams of revenue
Estimations for reference only
Geographic Distribution
Estimations for reference only
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
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Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$740.74
Current Market Price: $563.74
IV/P Ratio: 1.31x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
24.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for ASML
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (28.73)
P/B ratio ≤ 1.5 (11.77)
Current ratio ≥ 2.0 (1.53x)
Long-term debt < Net current assets (0.34x)
Margin of safety (24.0%)
ASML does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
52.08%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-29)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
51.28%
Higher values indicate better efficiency in production
TTM (as of 2025-04-29)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
26.79%
Higher values indicate better overall profitability
TTM (as of 2025-04-29)
ASML's net profit margin of 26.79% indicates that a significant portion of revenue is converted into actual profit, showcasing effective cost management.
The operating profit margin of 31.92% reflects strong operational efficiency and profitability from core business activities.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.20x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.53x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
The debt-to-equity ratio of 0.20 indicates that ASML is financing its operations primarily with equity rather than debt, which is a sign of financial stability.
An interest coverage ratio of 710.44 shows that ASML generates ample earnings to cover interest expenses, indicating excellent financial health.
The quick ratio of 0.99 suggests that ASML may not have enough liquid assets to cover its current liabilities without selling inventory, which could pose liquidity risks.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
ASML reported total net sales of €28.3 billion for the full year 2024, with a gross margin of 51.3%. This demonstrates financial robustness and effective cost management.
The company generated €9.1 billion in free cash flow for 2024, indicating strong cash generation capabilities which can be used for investment and shareholder returns.
ASML has successfully achieved technology milestones with new product releases, especially in EUV technology. Their R&D investment of €4.3 billion represents a commitment to innovation.
ASML expects its China business to return to a normalized percentage of total sales, which could impact future revenue growth.
The company indicated that order intake can be unpredictable and does not always reflect business momentum, which could affect investor confidence.
ASML anticipates increased demand driven by artificial intelligence and advanced Logic and Memory processes, projecting full-year revenue for 2025 between €30 billion and €35 billion.
Looking towards 2030, ASML estimates a revenue opportunity between €44 billion and €60 billion, indicating strong long-term growth potential.
There are risks related to geopolitics and export controls, particularly concerning the China market, which could negatively impact future orders.
While ASML has flexibility in their supply chain, there are concerns about the ability to meet customer demand on time if order commitments do not materialize early in the year.