ASML Holding (ASML) AI Stock Analysis

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ASML Holding

(NASDAQ:ASML)

78Outperform

ASML's overall stock score of 78 reflects its strong financial performance and positive earnings call highlights, particularly in EUV technology and AI growth prospects. While the technical analysis suggests some caution due to potential short-term weakness, the valuation indicates a premium pricing in line with high growth expectations. Tariff uncertainties and order book challenges are noted risks.

Positive Factors

Bookings and Demand

ASML reported 4Q24 system bookings of approximately €7.1B, significantly higher than the prior quarter, suggesting strong demand.

China Market

ASML now expects total China revenue to be a bit over 25% of total revenue, an improvement from prior expectations.

Revenue Guidance

ASML reiterated its €30-€35B revenue guide for 2025, with EUV backlog covering the guide midpoint.

Negative Factors

Bookings Shortfall

1Q25 system bookings were lower than expected, with EUV bookings significantly below buyside expectations.

Tariff Uncertainty

Tariff uncertainty remains a key unknown variable with risk of demand destruction.

ASML Holding (ASML) vs. S&P 500 (SPY)

Market Cap

$288.57B

Dividend Yield0.79%

Average Volume (3M)1.72M

Price to Earnings (P/E)31.5

Beta (1Y)1.52

Revenue Growth16.46%

EPS Growth21.29%

CountryUS

Employees43,129

SectorTechnology

Sector Strength77

IndustrySemiconductors

Share Statistics

EPS (TTM)6.83

Shares Outstanding393,830,700

10 Day Avg. Volume1,278,576

30 Day Avg. Volume1,719,258

Financial Highlights & Ratios

PEG Ratio1.78

Price to Book (P/B)13.33

Price to Sales (P/S)0.00

P/FCF Ratio25.18

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$905.00

Price Target Upside20.81% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering3

ASML Holding Business Overview & Revenue Model

Company DescriptionASML Holding (ASML) is a leading company in the semiconductor industry, primarily known for designing and manufacturing photolithography machines. These machines are crucial for the production of integrated circuits (ICs) or microchips. ASML is headquartered in Veldhoven, Netherlands, and operates globally, serving major semiconductor manufacturers. The company is renowned for its advanced Extreme Ultraviolet (EUV) lithography systems, which are pivotal in enabling the production of smaller, faster, and more power-efficient chips.

How the Company Makes MoneyASML generates revenue primarily through the sale of its photolithography systems, including both Deep Ultraviolet (DUV) and Extreme Ultraviolet (EUV) lithography machines. The company also provides maintenance and upgrade services for these machines, ensuring their optimal performance. A significant portion of ASML's revenue comes from long-term service agreements and the sale of spare parts. Additionally, ASML engages in strategic partnerships and collaborations with major semiconductor manufacturers and suppliers, which further enhances its revenue streams. The company's success is largely driven by the continuous demand for advanced semiconductor technologies in various sectors, including consumer electronics, automotive, and data centers.

ASML Holding Key Performance Indicators (KPIs)

Any

Lithography Systems Sold

Lithography Systems Sold
Tracks the number of lithography systems sold, reflecting ASML's market penetration and the adoption rate of its advanced semiconductor manufacturing technology.

Chart InsightsASML's lithography systems sales show significant fluctuations, with a notable dip in early 2024 followed by a recovery. The earnings call highlights strong EUV technology milestones and AI-driven growth expectations, which may drive future sales. However, challenges such as negative free cash flow, tariff uncertainties, and order book volatility could impact sales stability. Despite these risks, the company's strategic focus on EUV advancements and AI demand suggests potential for sustained growth in the coming years.

Data provided by:

Main Street Data

ASML Holding Financial Statement Overview

Summary

ASML demonstrates strong financial performance with high profitability margins, effective leverage management, and robust cash flow generation. The income statement is particularly strong with impressive gross and net profit margins, while the balance sheet shows solid financial health with moderate leverage. Cash flow is healthy, indicating efficient capital management.

Income Statement

Very Positive

ASML's income statement shows robust performance with a gross profit margin of 52.0% and a net profit margin of 28.3% for TTM. The company has demonstrated consistent revenue growth, with a 10.1% increase in the recent annual period. EBIT and EBITDA margins are strong at 33.8% and 36.8%, respectively, indicating efficient operations and strong profitability.

Balance Sheet

Very Positive

The balance sheet reflects solid financial health, with a debt-to-equity ratio of 0.21, indicating moderate leverage. The return on equity (ROE) is high at 49.7%, showcasing effective management of shareholder funds. With an equity ratio of 38.5%, ASML maintains a stable capital structure, though there is room for improvement in asset utilization.

Cash Flow

Very Positive

ASML has a healthy cash flow position, with an operating cash flow to net income ratio of 1.31, suggesting strong cash generation relative to net income. The free cash flow to net income ratio stands at 1.07, indicating efficient capital expenditure management and positive cash flow growth of 2.2% over the previous period.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
30.71B	28.26B	27.56B	21.17B	18.61B	13.98B
	Gross Profit
15.98B	14.49B	14.14B	10.51B	9.81B	6.80B
	EBIT
10.37B	9.02B	9.04B	7.32B	6.75B	4.05B
	EBITDA
11.31B	9.94B	9.98B	7.16B	6.99B	4.53B
	Net Income Common Stockholders
8.70B	7.57B	7.84B	5.62B	5.88B	3.55B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
9.10B	12.74B	7.01B	7.38B	7.59B	7.35B
	Total Assets
45.48B	48.59B	39.96B	38.83B	30.23B	27.27B
	Total Debt
3.68B	3.68B	4.63B	4.26B	4.08B	4.66B
	Net Debt
-5.42B	-9.06B	-2.37B	-3.01B	-2.88B	-1.39B
	Total Liabilities
27.98B	30.11B	26.51B	27.54B	20.09B	13.40B
	Stockholders Equity
17.50B	18.48B	13.45B	11.29B	10.14B	13.87B
Cash Flow		Free Cash Flow
9.29B	9.08B	3.25B	7.22B	9.91B	3.63B
	Operating Cash Flow
11.36B	11.17B	5.44B	9.43B	10.85B	4.63B
	Investing Cash Flow
-2.30B	-2.61B	-2.69B	-1.92B	-72.00M	-1.35B
	Financing Cash Flow
-5.06B	-2.83B	-3.00B	-7.19B	-9.89B	-753.00M

ASML Holding Technical Analysis

Technical Analysis Sentiment

Positive

Last Price749.13

Price Trends

50DMA

686.64

Positive

100DMA

707.90

Positive

200DMA

738.11

Positive

Market Momentum

MACD

22.94

Negative

RSI

63.14

Neutral

STOCH

77.03

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ASML, the sentiment is Positive. The current price of 749.13 is above the 20-day moving average (MA) of 701.16, above the 50-day MA of 686.64, and above the 200-day MA of 738.11, indicating a bullish trend. The MACD of 22.94 indicates Negative momentum. The RSI at 63.14 is Neutral, neither overbought nor oversold. The STOCH value of 77.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ASML.

ASML Holding Risk Analysis

ASML Holding disclosed 28 risk factors in its most recent earnings report. ASML Holding reported the most risks in the “Tech & Innovation” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

ASML Holding Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AMAT	82 Outperform	$134.82B	20.16	36.37%	0.97%	6.12%	-5.66%
ASML	78 Outperform	$288.57B	31.51	55.21%	0.79%	16.46%	21.29%
LRCX	78 Outperform	$107.22B	23.52	53.14%	1.06%	20.33%	31.89%
TSM	77 Outperform	$857.95B	24.99	32.11%	1.00%	35.45%	47.97%
KLAC	74 Outperform	$104.63B	28.75	104.10%	0.80%	20.44%	44.14%
Sector *	60 Neutral	$11.58B	10.33	-7.23%	2.94%	7.47%	-10.84%
INTC	48 Neutral	$94.48B	―	-18.66%	2.34%	-3.97%	-562.40%

* Technology Sector Average

Performance Comparison

ASML

ASML Holding

748.76

-169.36

-18.45%

AMAT

Applied Materials

165.73

-52.23

-23.96%

INTC

Intel

21.27

-10.27

-32.56%

KLAC

KLA

787.01

28.92

3.81%

LRCX

Lam Research

84.29

-11.06

-11.60%

TSM

TSMC

193.45

41.45

27.27%

ASML Holding Earnings Call Summary

Earnings Call Date:Apr 16, 2025

(Q1-2025)

% Change Since: 9.92%|

Next Earnings Date:Jul 16, 2025

Earnings Call Sentiment Neutral

ASML reported strong financial results for Q1 2025, with positive developments in EUV technology and a positive outlook driven by AI demand. However, the company faces challenges from negative free cash flow, tariff uncertainties, and order book volatility, creating a balanced sentiment overall.

Q1-2025 Updates

Positive Updates

Strong First Quarter Financial Performance

ASML reported total net sales of EUR7.7 billion in Q1 2025, in line with guidance. Net system sales were EUR5.7 billion, driven by EUR3.2 billion from EUV sales and EUR2.5 billion from non-EUV sales. Gross margin was above guidance at 54%.

EUV Technology Milestones

ASML achieved significant milestones in EUV technology, including the rollout of the NXE:3800E system at full specification and advancements in High NA EUV systems, with promising reports from customers such as Intel and Samsung.

Dividend and Share Buyback

ASML paid a third quarterly interim dividend of EUR1.52 per ordinary share and completed share buybacks totaling around EUR2.7 billion in Q1 2025.

Positive Outlook for AI-Driven Growth

ASML's management indicated that the growth in Artificial Intelligence remains a key driver for the industry, with expectations for both 2025 and 2026 to be growth years.

Negative Updates

Negative Free Cash Flow

ASML reported a free cash flow of minus EUR475 million in Q1 2025, attributed to customer payment dynamics and continued investments in fixed assets.

Tariff Uncertainty

ASML faces elevated uncertainty surrounding tariffs, with potential direct and indirect impacts on the business. The situation remains dynamic and unresolved.

Order Book Challenges

Q1 net system bookings were EUR3.9 billion, indicating some volatility and uncertainty in the order environment, potentially impacted by macroeconomic factors and tariff discussions.

Company Guidance

During ASML's 2025 first quarter financial results conference call, the company provided detailed guidance and insights into its financial performance and future outlook. ASML reported total net sales of EUR7.7 billion, with net system sales accounting for EUR5.7 billion, including EUR3.2 billion from EUV sales. The gross margin exceeded expectations at 54%, attributed to favorable EUV product mix and customer productivity milestones. Operating expenses aligned with guidance, with R&D at EUR1.161 billion and SG&A at EUR281 million. The effective tax rate for the quarter was 16.7%, with an annualized expectation of around 17% for 2025. ASML's Q1 net income was EUR2.4 billion, leading to earnings per share of EUR6. The company ended the quarter with EUR9.1 billion in cash and short-term investments, despite a free cash flow of minus EUR475 million. Order book activity indicated EUR3.9 billion in net system bookings, with a 60% focus on Logic. ASML anticipates Q2 net sales between EUR7.2 billion and EUR7.7 billion, with gross margins expected between 50% and 53%, influenced by tariff uncertainties. For the full year 2025, ASML projects revenues between EUR30 billion and EUR35 billion, with growth anticipated for 2026.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.