ASML HOLDING NV-NY REG SHS (NASDAQ:ASML) - A Strong Growth Stock with Solid Fundamentals

ASML HOLDING NV-NY REG SHS (NASDAQ:ASML) was identified as an affordable growth stock by our stock screener. ASML demonstrates strong growth potential while maintaining solid profitability and financial health, all at a reasonable valuation. Below, we examine why this semiconductor equipment leader stands out.

Growth Prospects

ASML has shown impressive growth in recent years, with key highlights including:

• Earnings Per Share (EPS) grew by 22.60% over the past year.
• Over the past five years, EPS has increased at an average annual rate of 25.62%.
• Revenue has expanded by 19.05% annually on average, indicating strong demand for its semiconductor equipment.
• Analysts expect EPS to grow by 19.86% and revenue by 12.02% annually in the coming years.

Valuation Considerations

While ASML is not the cheapest stock in its sector, its valuation remains reasonable relative to its growth and industry peers:

• The Price/Earnings (P/E) ratio of 30.50 is slightly above the S&P 500 average but below the industry average.
• The Forward P/E of 23.92 is in line with the sector, suggesting expectations of continued earnings growth.
• The PEG ratio, which accounts for growth, indicates a fair valuation given ASML’s profitability and expansion prospects.

Profitability & Financial Health

ASML excels in profitability and financial stability:

• Profitability Rating: 9/10 – The company boasts strong margins, including a 26.79% net profit margin and 31.92% operating margin, outperforming most peers.
• Health Rating: 7/10 – ASML maintains a solid balance sheet with a low debt-to-equity ratio of 0.21 and strong cash flow generation.
• Return on Equity (ROE) of 40.98% and Return on Invested Capital (ROIC) of 25.98% highlight efficient capital use.

Our Affordable Growth screener lists more stocks with similar characteristics and is updated daily.
For a deeper dive, review the full fundamental analysis of ASML.

Disclaimer

This is not investing advice. Always conduct your own research before making investment decisions.