Amidst today's fast-paced and highly competitive business environment, it is crucial for investors and industry enthusiasts to conduct comprehensive company evaluations. 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 | 30.71 | 19.51 | 8.72 | 16.76% | $2.36 | $3.46 | 15.48% |
| Applied Materials Inc | 18.89 | 7.94 | 4.58 | 10.68% | $2.0 | $2.98 | -1.46% |
| Lam Research Corp | 22.06 | 10.65 | 5.54 | 10.92% | $1.16 | $1.65 | -31.38% |
| KLA Corp | 22.65 | 23.02 | 6.92 | 25.09% | $1.03 | $1.45 | -12.02% |
| Entegris Inc | 68.13 | 4.04 | 3.73 | 0.99% | $0.2 | $0.37 | -10.62% |
| Teradyne Inc | 39.51 | 5.32 | 9.07 | 5.25% | $0.17 | $0.4 | -64.91% |
| Enphase Energy Inc | 18.95 | 10.17 | 4.05 | 11.47% | $0.16 | $0.26 | -13.18% |
| Onto Innovation Inc | 35.06 | 3.64 | 6.77 | 1.58% | $0.04 | $0.1 | -25.61% |
| Amkor Technology Inc | 13.99 | 1.47 | 0.85 | 3.5% | $0.33 | $0.28 | -12.57% |
| Axcelis Technologies Inc | 17.83 | 5.09 | 3.81 | 8.53% | $0.08 | $0.13 | 27.56% |
| SolarEdge Technologies Inc | 19.01 | 1.60 | 1.17 | -2.44% | $-0.0 | $0.14 | -13.32% |
| Kulicke & Soffa Industries Inc | 24.87 | 2.08 | 3.02 | 0.35% | $0.01 | $0.09 | -48.7% |
| Veeco Instruments Inc | 26.04 | 2.35 | 2.35 | 3.99% | $0.03 | $0.08 | 3.17% |
| Cohu Inc | 28.05 | 1.52 | 2.11 | 0.41% | $0.02 | $0.07 | -27.04% |
| Photronics Inc | 10.20 | 1.27 | 1.37 | 2.85% | $0.08 | $0.09 | 1.94% |
| PDF Solutions Inc | 403.14 | 4.87 | 6.59 | -2.23% | $0.0 | $0.03 | 6.25% |
| ACM Research Inc | 15.10 | 1.36 | 2.13 | 3.61% | $0.03 | $0.09 | 26.07% |
| Aehr Test Systems | 36.24 | 8.33 | 9.11 | 6.0% | $0.0 | $0.01 | 93.27% |
| Amtech Systems Inc | 29.14 | 1.05 | 0.87 | -1.03% | $0.0 | $0.01 | 53.98% |
| Average | 47.16 | 5.32 | 4.11 | 4.97% | $0.3 | $0.46 | -2.7% |
By analyzing ASML Holding, we can infer the following trends:
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The stock's Price to Earnings ratio of 30.71 is lower than the industry average by 0.65x, suggesting potential value in the eyes of market participants.
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With a Price to Book ratio of 19.51, which is 3.67x the industry average, ASML Holding might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
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The stock's relatively high Price to Sales ratio of 8.72, surpassing the industry average by 2.12x, may indicate an aspect of overvaluation in terms of sales performance.
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With a Return on Equity (ROE) of 16.76% that is 11.79% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $2.36 Billion, which is 7.87x above the industry average, indicating stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $3.46 Billion, which indicates 7.52x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company is experiencing remarkable revenue growth, with a rate of 15.48%, outperforming the industry average of -2.7%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.
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.
When examining ASML Holding in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
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Among its top 4 peers, ASML Holding has a stronger financial position with a lower debt-to-equity ratio of 0.38.
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This indicates that the company relies less on debt financing and maintains a more favorable balance between debt and equity, which can be viewed positively 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 has a high ROE, EBITDA, gross profit, and revenue growth, suggesting 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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