In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing ASML Holding ASML alongside its primary competitors in the Semiconductors & Semiconductor Equipment industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer valuable insights to investors and shed light on company's performance within the industry.
ASML Holding Background
ASML is the 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 photo mask 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 high portion of the cost of making cutting-edge chips. ASML outsources the manufacturing of most of its parts, acting like an assembler. ASML's main clients are TSMC, Samsung, and Intel.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| ASML Holding NV | 32.49 | 20.64 | 9.23 | 16.76% | $2.36 | $3.46 | 15.48% |
| Applied Materials Inc | 18.43 | 7.65 | 4.76 | 12.75% | $2.36 | $3.17 | 4.64% |
| Lam Research Corp | 24.34 | 11.75 | 6.11 | 10.92% | $1.16 | $1.65 | -31.38% |
| KLA Corp | 24.78 | 25.19 | 7.57 | 25.09% | $1.03 | $1.45 | -12.02% |
| Entegris Inc | 77.59 | 4.60 | 4.25 | 0.99% | $0.2 | $0.37 | -10.62% |
| Teradyne Inc | 43 | 5.79 | 9.87 | 5.25% | $0.17 | $0.4 | -64.91% |
| Enphase Energy Inc | 25.11 | 13.48 | 5.36 | 11.47% | $0.16 | $0.26 | -13.18% |
| Amkor Technology Inc | 16.91 | 1.77 | 1.03 | 3.5% | $0.33 | $0.28 | -12.57% |
| Onto Innovation Inc | 42.94 | 3.95 | 7.91 | 2.14% | $0.05 | $0.11 | -18.51% |
| SolarEdge Technologies Inc | 21.26 | 1.79 | 1.31 | -2.44% | $-0.0 | $0.14 | -13.32% |
| Axcelis Technologies Inc | 18.33 | 5.24 | 3.92 | 8.53% | $0.08 | $0.13 | 27.56% |
| Kulicke & Soffa Industries Inc | 50.67 | 2.42 | 3.89 | 1.99% | $0.04 | $0.1 | -29.34% |
| Veeco Instruments Inc | 28.22 | 2.54 | 2.54 | 3.99% | $0.03 | $0.08 | 3.17% |
| Cohu Inc | 30.26 | 1.64 | 2.28 | 0.41% | $0.02 | $0.07 | -27.04% |
| Photronics Inc | 11.22 | 1.39 | 1.51 | 2.85% | $0.08 | $0.09 | 1.94% |
| PDF Solutions Inc | 440.57 | 5.33 | 7.20 | -2.23% | $0.0 | $0.03 | 6.25% |
| ACM Research Inc | 16.31 | 1.46 | 2.30 | 3.61% | $0.03 | $0.09 | 26.07% |
| Aehr Test Systems | 39.81 | 9.16 | 10.01 | 6.0% | $0.0 | $0.01 | 93.27% |
| Amtech Systems Inc | 30.60 | 1.10 | 0.91 | -1.03% | $0.0 | $0.01 | 53.98% |
| Average | 53.35 | 5.9 | 4.6 | 5.21% | $0.32 | $0.47 | -0.89% |
Through a meticulous analysis of ASML Holding, we can observe the following trends:
-
With a Price to Earnings ratio of 32.49, which is 0.61x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
-
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 20.64 which exceeds the industry average by 3.5x.
-
The Price to Sales ratio of 9.23, which is 2.01x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
-
With a Return on Equity (ROE) of 16.76% that is 11.55% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
-
With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $2.36 Billion, which is 7.37x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
-
With higher gross profit of $3.46 Billion, which indicates 7.36x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
-
The company is experiencing remarkable revenue growth, with a rate of 15.48%, outperforming the industry average of -0.89%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
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:
-
When comparing the debt-to-equity ratio, ASML Holding is in a stronger financial position compared to its top 4 peers.
-
The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.38.
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.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
