ASML Holding Profitability Analysis

ASML Stock  USD 1,014  22.52  2.17%   
Considering the key profitability indicators obtained from ASML Holding's historical financial statements, ASML Holding NV is performing exceptionally good at this time. It has a great probability to showcase excellent profitability results in July. Profitability indicators assess ASML Holding's ability to earn profits and add value for shareholders.
 
Net Income  
First Reported
1995-03-31
Previous Quarter
B
Current Value
1.2 B
Quarterly Volatility
528.3 M
 
Dot-com Bubble
 
Housing Crash
 
Credit Downgrade
 
Yuan Drop
 
Covid
At this time, ASML Holding's Price To Sales Ratio is quite stable compared to the past year. Days Sales Outstanding is expected to rise to 96.12 this year, although the value of Operating Cash Flow Sales Ratio will most likely fall to 0.15. At this time, ASML Holding's Net Income Applicable To Common Shares is quite stable compared to the past year. Net Income From Continuing Ops is expected to rise to about 8.2 B this year, although the value of Change To Netincome is projected to rise to (138.7 M).
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin0.320.5129
Way Down
Slightly volatile
Net Profit Margin0.30.2844
Notably Up
Slightly volatile
Operating Profit Margin0.340.3281
Sufficiently Up
Slightly volatile
Pretax Profit Margin0.350.3296
Notably Up
Slightly volatile
Return On Assets0.210.1962
Notably Up
Pretty Stable
Return On Equity0.610.5827
Sufficiently Up
Slightly volatile
For ASML Holding profitability analysis, we use financial ratios and fundamental drivers that measure the ability of ASML Holding to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well ASML Holding NV utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between ASML Holding's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of ASML Holding NV over time as well as its relative position and ranking within its peers.
  
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Is Semiconductors & Semiconductor Equipment space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of ASML Holding. If investors know ASML will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about ASML Holding listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.37)
Dividend Share
4.65
Earnings Share
19.38
Revenue Per Share
1.1939
Quarterly Revenue Growth
(0.22)
The market value of ASML Holding NV is measured differently than its book value, which is the value of ASML that is recorded on the company's balance sheet. Investors also form their own opinion of ASML Holding's value that differs from its market value or its book value, called intrinsic value, which is ASML Holding's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because ASML Holding's market value can be influenced by many factors that don't directly affect ASML Holding's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between ASML Holding's value and its price as these two are different measures arrived at by different means. Investors typically determine if ASML Holding is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, ASML Holding's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

ASML Holding NV Return On Asset vs. Return On Equity Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining ASML Holding's current stock value. Our valuation model uses many indicators to compare ASML Holding value to that of its competitors to determine the firm's financial worth.
ASML Holding NV is rated second in return on equity category among its peers. It is rated third in return on asset category among its peers reporting about  0.23  of Return On Asset per Return On Equity. The ratio of Return On Equity to Return On Asset for ASML Holding NV is roughly  4.35 . At this time, ASML Holding's Return On Equity is quite stable compared to the past year. Comparative valuation analysis is a catch-all technique that is used if you cannot value ASML Holding by discounting back its dividends or cash flows. It compares the stock's price multiples to nearest competition to determine if the stock is relatively undervalued or overvalued.

ASML Return On Asset vs. Return On Equity

Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.

ASML Holding

Return On Equity

 = 

Net Income

Total Equity

 = 
0.6
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Return on Asset or ROA shows how effective is the management of the company in generating income from utilizing all of the assets at their disposal. It is a useful ratio to evaluate the performance of different departments of a company as well as to understand management performance over time.

ASML Holding

Return On Asset

 = 

Net Income

Total Assets

 = 
0.14
Return on Asset measures overall efficiency of a company in generating profits from its total assets. It is expressed as the percentage of profits earned per dollar of Asset. A low ROA typically means that a company is asset-intensive and therefore will needs more money to continue generating revenue in the future.

ASML Return On Asset Comparison

ASML Holding is currently under evaluation in return on asset category among its peers.

ASML Holding Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in ASML Holding, profitability is also one of the essential criteria for including it into their portfolios because, without profit, ASML Holding will eventually generate negative long term returns. The profitability progress is the general direction of ASML Holding's change in net profit over the period of time. It can combine multiple indicators of ASML Holding, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income345 M309.9 M
Operating IncomeB9.5 B
Income Before Tax9.1 B9.5 B
Total Other Income Expense Net41.2 M43.3 M
Net Income7.8 B8.2 B
Income Tax Expense1.4 B1.5 B
Net Income Applicable To Common Shares6.5 B6.8 B
Net Income From Continuing Ops7.8 B8.2 B
Interest Income193.9 M203.6 M
Net Interest Income41.2 M43.3 M
Change To Netincome-146 M-138.7 M
Net Income Per Share 19.91  20.90 
Income Quality 0.69  0.54 
Net Income Per E B T 0.86  0.67 

ASML Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on ASML Holding. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of ASML Holding position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the ASML Holding's important profitability drivers and their relationship over time.

ASML Holding Profitability Trends

ASML Holding profitability trend refers to the progression of profit or loss within a business. An upward trend means that ASML Holding's profit has generally increased over time, and a downward profitability trend means profits are declining. Recognizing problems early in profitability trends allows investors to address revenue and cost issues in advance. Investors and analysts usually monitor three types of profitability trends: gross, operating, and net. Gross profit is the difference between revenue and costs of goods sold. Operating profit is ASML Holding's gross profit minus its overhead. After you account for other unusual revenue, expenses, and costs, you get net profit. Gross profit trends are often a good indicator of future profitability. If you have high gross profit margins, you have a better chance to cover overhead and make money.

ASML Holding Profitability Drivers Correlations

One of the toughest challenges investors face today is learning how to quickly synthesize and read into endless financial statements and information provided by the company, SEC reporting, and various external parties. Understanding the correlation between ASML Holding different financial indicators related to revenue and profit generation helps investors identify and prioritize their investing strategies towards ASML Holding in a much-optimized way. Analyzing correlations between profit drivers that are directly associated with dollar figures is the most effective way to break down ASML Holding's future profitability.

Use ASML Holding in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if ASML Holding position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ASML Holding will appreciate offsetting losses from the drop in the long position's value.

ASML Holding Pair Trading

ASML Holding NV Pair Trading Analysis

The ability to find closely correlated positions to ASML Holding could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace ASML Holding when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back ASML Holding - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling ASML Holding NV to buy it.
The correlation of ASML Holding is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as ASML Holding moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if ASML Holding NV moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for ASML Holding can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

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Additional Information and Resources on Investing in ASML Stock

When determining whether ASML Holding NV is a strong investment it is important to analyze ASML Holding's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact ASML Holding's future performance. For an informed investment choice regarding ASML Stock, refer to the following important reports:
To fully project ASML Holding's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of ASML Holding NV at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include ASML Holding's income statement, its balance sheet, and the statement of cash flows.
Potential ASML Holding investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although ASML Holding investors may work on each financial statement separately, they are all related. The changes in ASML Holding's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on ASML Holding's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.