Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating ASML Holding ASML in comparison to its major competitors within the Semiconductors & Semiconductor Equipment industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in the industry.
ASML Holding Background
Founded in 1984 and based in the Netherlands, ASML is the market share leader in photolithography systems used in the manufacturing of semiconductors. Photolithography is the process in which a light source is used to expose circuit patterns from a photomask onto a semiconductor wafer. The latest technological advances in this segment allow chipmakers to continually increase the number of transistors on the same area of silicon, with lithography historically representing a meaningful portion of the cost of making cutting-edge chips. Chipmakers require next-generation EUV lithography tools to continue past the 5-nanometer process node, which only ASML can provide. ASML's products are used at every major semiconductor manufacturer, including Intel, Samsung, and TSMC.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| ASML Holding NV | 31.04 | 21.58 | 8.90 | 19.04% | $2.44 | $3.54 | 27.1% |
| Applied Materials Inc | 19.13 | 8.04 | 4.64 | 10.68% | $2.0 | $2.98 | -1.46% |
| Lam Research Corp | 19.72 | 10.55 | 5.10 | 9.66% | $1.0 | $1.46 | -30.81% |
| KLA Corp | 20.75 | 23.40 | 6.70 | 24.44% | $0.95 | $1.39 | -5.29% |
| Enphase Energy Inc | 31.38 | 17.47 | 6.48 | 16.18% | $0.2 | $0.32 | 34.12% |
| Teradyne Inc | 29.41 | 6.29 | 5.76 | 4.92% | $0.17 | $0.4 | -18.59% |
| Entegris Inc | 181.44 | 4.39 | 3.91 | 6.06% | $0.36 | $0.38 | 30.11% |
| Onto Innovation Inc | 40.75 | 4.24 | 7.87 | 1.58% | $0.04 | $0.1 | -25.61% |
| SolarEdge Technologies Inc | 23.34 | 2.71 | 1.94 | 4.91% | $0.16 | $0.32 | 36.21% |
| Amkor Technology Inc | 9.97 | 1.54 | 0.84 | 1.73% | $0.25 | $0.19 | -3.12% |
| Axcelis Technologies Inc | 26.48 | 7.25 | 5.35 | 8.52% | $0.07 | $0.12 | 23.87% |
| Kulicke & Soffa Industries Inc | 27.05 | 2.26 | 3.28 | 0.35% | $0.01 | $0.09 | -48.7% |
| Cohu Inc | 23.65 | 1.78 | 2.31 | 1.12% | $0.03 | $0.08 | -22.24% |
| Veeco Instruments Inc | 35.52 | 2.61 | 2.74 | -14.24% | $-0.07 | $0.07 | -1.44% |
| Photronics Inc | 11.01 | 1.37 | 1.48 | 2.85% | $0.08 | $0.09 | 1.94% |
| Ultra Clean Holdings Inc | 52.92 | 1.48 | 0.62 | -1.09% | $0.03 | $0.07 | -30.75% |
| PDF Solutions Inc | 138.26 | 5.41 | 7.45 | 3.12% | $0.0 | $0.03 | 20.0% |
| ACM Research Inc | 19.60 | 1.72 | 2.79 | 3.88% | $0.04 | $0.07 | 38.49% |
| Aehr Test Systems | 62.59 | 14.38 | 15.74 | 6.0% | $0.0 | $0.01 | -7.39% |
| Ichor Holdings Ltd | 38.15 | 1.51 | 0.81 | -3.53% | $0.01 | $0.03 | -43.86% |
| Amtech Systems Inc | 31.08 | 1.12 | 0.93 | -1.03% | $0.0 | $0.01 | 53.98% |
| Average | 42.11 | 5.98 | 4.34 | 4.31% | $0.27 | $0.41 | -0.03% |
By closely examining ASML Holding, we can identify the following trends:
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At 31.04, the stock's Price to Earnings ratio is 0.74x less than the industry average, suggesting favorable growth potential.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 21.58 which exceeds the industry average by 3.61x.
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With a relatively high Price to Sales ratio of 8.9, which is 2.05x the industry average, the stock might be considered overvalued based on sales performance.
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The company has a higher Return on Equity (ROE) of 19.04%, which is 14.73% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $2.44 Billion, which is 9.04x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
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The gross profit of $3.54 Billion is 8.63x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 27.1% exceeds the industry average of -0.03%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its equity.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
In terms of the Debt-to-Equity ratio, ASML Holding stands in comparison with its top 4 peers, leading to the following comparisons:
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Compared to its top 4 peers, ASML Holding has a stronger financial position indicated by its lower debt-to-equity ratio of 0.43.
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This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute by investors.
Key Takeaways
ASML Holding has a low PE ratio compared to its peers in the Semiconductors & Semiconductor Equipment industry, indicating that it may be undervalued. The company also has a high PB ratio, suggesting that investors are willing to pay a premium for its book value. Additionally, ASML Holding has a high PS ratio, indicating that it may be overvalued based on its sales. On the other hand, the company's high ROE, EBITDA, gross profit, and revenue growth suggest strong financial performance compared to its industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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