2024-07-12 16:11:24 ET
Summary
- ASML Holding N.V. is expected to release its 2Q earnings later this month, with conservative guidance indicating a -13.8% YoY decline in revenue and continued margin pressure.
- The recent rally in stock price was largely due to the optimism from TSMC's high-NA EUV deal, which can improve its growth outlook in FY2025.
- The management reiterated that 10% to 15% of China's sales in FY2024 will be impacted by export controls, posing a structural geopolitical risk for the company.
- Considering an expected 56.1% YoY of its EPS growth in FY2025, the stock is still trading at 32.x of P/E FY2025, indicating that most of the next year's growth tailwind has been priced in.
- The company forecasts flat YoY revenue for FY2024, which creates downward pressure on margins due to a weak top-line growth.
Investment Thesis
ASML Holding N.V. ( ASML ) stock has rallied 40% YTD, largely driven by anticipated long-term higher demand for lithography systems amid the GenAI boom. As ASML exclusively manufactures EUV machines, the transition from the pre-EUV to the post-EUV in the semi industry will create a significant growth opportunity for the company. In 2019, EUV patterning technology was deployed for the mass production of 7nm chips. Now, the company is expected to introduce the first high-NA EUV, which is anticipated to support high-volume chips manufacturing in FY2025....
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ASML: The Stock Remains Expensive Amidst Multiple Uncertainties