In the ever-changing and fiercely competitive business landscape, conducting thorough company analysis is crucial for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating ASML Holding ASML and its primary competitors in the Semiconductors & Semiconductor Equipment industry. By closely examining key financial metrics, market position, and growth prospects, our aim is to provide valuable insights for investors and shed light on company's performance within 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 | 28.75 | 18.21 | 8.17 | 16.76% | $2.36 | $3.46 | 15.48% |
| Applied Materials Inc | 17.27 | 7.25 | 4.19 | 10.68% | $2.0 | $2.98 | -1.46% |
| Lam Research Corp | 19.85 | 9.58 | 4.98 | 10.92% | $1.16 | $1.65 | -31.38% |
| KLA Corp | 20.48 | 20.88 | 6.25 | 25.09% | $1.03 | $1.45 | 1.78% |
| Entegris Inc | 162 | 3.92 | 3.49 | 6.06% | $0.36 | $0.38 | 30.11% |
| Enphase Energy Inc | 24.21 | 13.47 | 5 | 16.18% | $0.2 | $0.32 | 34.12% |
| Teradyne Inc | 25.18 | 5.38 | 4.93 | 4.92% | $0.17 | $0.4 | -18.59% |
| Onto Innovation Inc | 32.46 | 3.37 | 6.27 | 1.58% | $0.04 | $0.1 | -25.61% |
| Amkor Technology Inc | 9.03 | 1.40 | 0.76 | 1.73% | $0.25 | $0.19 | -3.12% |
| SolarEdge Technologies Inc | 16.13 | 1.87 | 1.34 | 4.91% | $0.16 | $0.32 | 36.21% |
| Axcelis Technologies Inc | 22.34 | 6.12 | 4.51 | 8.52% | $0.07 | $0.12 | 23.87% |
| Kulicke & Soffa Industries Inc | 24.39 | 2.04 | 2.96 | 0.35% | $0.01 | $0.09 | -48.7% |
| Cohu Inc | 20.56 | 1.55 | 2.01 | 1.12% | $0.03 | $0.08 | -22.24% |
| Veeco Instruments Inc | 30.56 | 2.25 | 2.36 | -14.24% | $-0.07 | $0.07 | -1.44% |
| Photronics Inc | 9.82 | 1.22 | 1.32 | 2.85% | $0.08 | $0.09 | 1.94% |
| ACM Research Inc | 17.38 | 1.52 | 2.47 | 3.88% | $0.04 | $0.07 | 38.49% |
| PDF Solutions Inc | 117.57 | 4.60 | 6.34 | 3.12% | $0.0 | $0.03 | 20.0% |
| Aehr Test Systems | 49.42 | 11.37 | 12.42 | 6.0% | $0.0 | $0.01 | 93.27% |
| Ichor Holdings Ltd | 31.82 | 1.26 | 0.67 | -3.53% | $0.01 | $0.03 | -43.86% |
| Amtech Systems Inc | 28.60 | 1.03 | 0.85 | -1.03% | $0.0 | $0.01 | 53.98% |
| Average | 35.74 | 5.27 | 3.85 | 4.69% | $0.29 | $0.44 | 7.23% |
By closely studying ASML Holding, we can observe the following trends:
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The Price to Earnings ratio of 28.75 is 0.8x lower than the industry average, indicating potential undervaluation for the stock.
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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 18.21 which exceeds the industry average by 3.46x.
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The stock's relatively high Price to Sales ratio of 8.17, 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 12.07% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $2.36 Billion, which is 8.14x above the industry average, implying stronger profitability and robust cash flow generation.
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The gross profit of $3.46 Billion is 7.86x above that of its industry, highlighting 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 7.23%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
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.
By evaluating ASML Holding against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:
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When considering the debt-to-equity ratio, ASML Holding exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.38, which can be perceived as a positive aspect 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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