Company Introduction
Headquarters Location: Veldhoven, Netherlands
Core Business Summary: ASML is a leading manufacturer of semiconductor lithography systems, which are used to create the complex patterns on microchips.
Overview
$1,002.30
34.23
29.29
$331.31B
Company Overview
Core Products & Services: Semiconductor lithography systems, including EUV and deep ultraviolet (DUV) systems, as well as related services and support.
Industry Sector: Technology, Semiconductors
Industry Trends
Industry Growth Next 5 Years: The semiconductor industry is expected to grow at a CAGR of 8-10% from 2023 to 2028, driven by increasing demand for advanced electronics and the growth of emerging technologies like AI, 5G, and the Internet of Things (IoT).
Key Demand Drivers: Increasing demand for advanced electronics, growth of emerging technologies like AI, 5G, and IoT, and the need for more powerful and efficient microchips.
Last 5 Year Cagr Industry Growth: The semiconductor industry has grown at a CAGR of 12.1% over the last 5 years (2018-2022).
Major Competitors: KLA-Tencor, Applied Materials, Tokyo Electron
Financials
| 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $6.29B | $6.88B | $8.96B | $10.94B | $11.82B | $13.98B | $18.61B | $21.17B | $27.56B | $28.26B |
| YoY % | +9.4% | +30.2% | +22.1% | +8.0% | +18.3% | +33.1% | +13.8% | +30.2% | +2.5% | |
| EBITDA | $1.78B | $2.02B | $2.76B | $3.39B | $3.25B | $4.55B | $7.23B | $7.10B | $9.98B | $10.12B |
| YoY % | +13.5% | +36.6% | +22.8% | -4.1% | +40.0% | +58.9% | -1.8% | +40.6% | +1.4% | |
| FCF | $1.65B | $1.34B | $1.44B | $2.46B | $2.51B | $3.67B | $9.95B | $7.20B | $3.25B | $9.10B |
| YoY % | -18.8% | +7.5% | +70.8% | +2.0% | +46.2% | +171.1% | -27.6% | -54.9% | +180.0% | |
| EPS | 3.69 | 3.84 | 5.58 | 7.23 | 6.90 | 9.81 | 16.93 | 14.73 | 19.91 | 19.24 |
| YoY % | +4.1% | +45.3% | +29.6% | -4.6% | +42.2% | +72.6% | -13.0% | +35.2% | -3.4% |
Growth Drivers
Historical Growth Drivers: Product innovation, such as the development of EUV lithography systems, has driven ASML's growth historically. The company has also benefited from strategic partnerships with major semiconductor manufacturers and the adoption of its technology in emerging markets.
Future Growth Drivers: The growth of emerging technologies like AI, 5G, and IoT is expected to drive demand for advanced microchips, which will in turn drive demand for ASML's lithography systems. The company is also investing in the development of new technologies, such as high-NA EUV, which is expected to further drive growth.
Examples: ASML's EUV systems have been adopted by major semiconductor manufacturers like TSMC, Samsung, and Intel, which has driven revenue growth. The company has also partnered with these manufacturers to develop new technologies and improve manufacturing processes.
Market Position
Competitive Position: ASML is the leading manufacturer of semiconductor lithography systems, with a dominant market share.
Estimated Market Share: 85-90%
Technological Moat: ASML's technology is highly complex and difficult to replicate, which provides a significant barrier to entry for competitors.
Strengths
- Strong financial performance
- Dominant market position
- Strong R&D capabilities
- Strategic partnerships
Weaknesses
- Cyclical exposure
- Regulatory risks
- Competition from new entrants
- Dependence on key customers
Valuations
Valuations for ASML
| Formula | Bull | Base | Bear | Margin of Safety |
|---|---|---|---|---|
| Ben Graham | $1.43K | $1.14K | $841.32 | 11.8% |
| Peter Lynch | – | $352.86 | – | -184.1% |
Rule of thumb (Lynch):
PEG ≈ 1 → Fairly valued
PEG < 1 → Undervalued (growth cheap relative to earnings)
PEG > 1.5 → Overvalued
Outlook
Balanced Forward Looking Analysis: ASML is well-positioned to benefit from the growth of emerging technologies like AI, 5G, and IoT, which will drive demand for advanced microchips and ASML's lithography systems. However, the company faces risks from cyclical exposure, regulatory risks, and competition from new entrants. Over the next 3-5 years, ASML is expected to continue to invest in R&D and expand its product offerings, which will drive revenue growth and maintain its dominant market position.
Opportunities: Growing demand for advanced microchips, increasing adoption of EUV lithography, and expansion into new markets like China.
Risks: Cyclical exposure, regulatory risks, competition from new entrants, and dependence on key customers.
Stock Price Performance
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Price | 100.57 | 132.18 | 193.05 | 192.48 | 249.01 | 637.10 | 667.73 | 673.99 | 992.95 | 667.34 |
| YoY % | +31.4% | +46.1% | -0.3% | +29.4% | +155.9% | +4.8% | +0.9% | +47.3% | -32.8% |
Stock 3 Year Rolling CAGR
| Metric | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | Average |
|---|---|---|---|---|---|---|---|---|---|
| Revenue | 12.54% | 16.76% | 9.66% | 8.50% | 16.34% | 14.84% | 13.98% | 10.11% | 12.84% |
| EBITDA | 15.79% | 18.78% | 5.59% | 10.33% | 30.54% | 15.99% | 11.32% | 12.55% | 15.11% |
| FCF | -4.47% | 22.46% | 20.33% | 14.17% | 58.24% | 25.26% | -31.14% | 8.09% | 14.12% |
| EPS | 14.78% | 23.48% | 7.33% | 10.71% | 34.88% | 14.51% | 5.55% | 9.31% | 15.07% |
| Price | – | 24.28% | 13.35% | 8.86% | 49.03% | 38.93% | 1.89% | 14.14% | 21.50% |
