ASML (ASML) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3-min read

ASML (ASML) closed at $452.90 in the latest trading session, marking a +0.42% move from the prior day. This move outpaced the S&P 500's daily loss of 0.06%. Elsewhere, the Dow gained 0.29%, while the tech-heavy Nasdaq added 0.23%.

Coming into today, shares of the equipment supplier to semiconductor makers had gained 17.75% in the past month. In that same time, the Computer and Technology sector gained 12.9%, while the S&P 500 gained 11.09%.

Investors will be hoping for strength from ASML as it approaches its next earnings release. On that day, ASML is projected to report earnings of $2.91 per share, which would represent a year-over-year decline of 2.35%. Our most recent consensus estimate is calling for quarterly revenue of $4.38 billion, down 2.04% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.10 per share and revenue of $15.73 billion, which would represent changes of +32.08% and +18.55%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for ASML. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. ASML is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that ASML has a Forward P/E ratio of 49.56 right now. This represents a premium compared to its industry's average Forward P/E of 20.55.

We can also see that ASML currently has a PEG ratio of 2.26. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Semiconductor Equipment - Wafer Fabrication was holding an average PEG ratio of 1.74 at yesterday's closing price.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 34, which puts it in the top 14% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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