Performance Comparison: ASML Holding And Competitors In Semiconductors & Semiconductor Equipment Industry

In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating ASML Holding (NASDAQ:ASML) against its key competitors in the Semiconductors & Semiconductor Equipment industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.

ASML Holding Background

ASML is the market leader in lithography systems for manufacturing semiconductors. Lithography is the process in which a light source is used to expose circuit patterns from a photo mask onto a semiconductor wafer. Lithography allows chipmakers to 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 largest 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	37.84	18.74	11.12	11.61%	$2.74	$3.88	0.65%
Applied Materials Inc	29.89	10.05	7.37	9.5%	$2.45	$3.27	-3.48%
Lam Research Corp	36.04	20.12	10.68	15.64%	$2.0	$2.68	27.74%
KLA Corp	38.43	32.24	13	23.17%	$1.48	$1.97	12.96%
Teradyne Inc	69.92	11.08	10.83	4.3%	$0.18	$0.45	4.33%
Qnity Electronics Inc	30.11	1.80	3.52	2.6%	$0.38	$0.57	11.15%
Entegris Inc	46.29	3.43	4.15	1.83%	$0.22	$0.35	-0.07%
MKS Inc	37.92	4.04	2.76	2.87%	$0.23	$0.46	10.27%
Amkor Technology Inc	32.48	2.31	1.55	2.98%	$0.34	$0.28	6.74%
Nova Ltd	41.33	8.06	11.92	5.42%	$0.07	$0.13	25.5%
Onto Innovation Inc	43.45	3.83	7.59	1.42%	$0.04	$0.11	-13.49%
Camtek Ltd	110.21	8.81	11.35	-8.83%	$0.03	$0.06	12.15%
FormFactor Inc	105.62	4.30	5.74	1.57%	$0.03	$0.08	-2.52%
Enphase Energy Inc	21.82	4.19	2.91	7.11%	$0.1	$0.2	7.76%
Axcelis Technologies Inc	20.36	2.62	3.24	2.54%	$0.04	$0.09	-16.74%
ACM Research Inc	21.59	1.68	2.83	2.97%	$0.06	$0.11	31.96%
Photronics Inc	15.07	1.73	2.42	5.38%	$0.06	$0.07	2.56%
Veeco Instruments Inc	36.58	2.09	2.69	1.22%	$0.02	$0.07	-10.24%
Average	43.36	7.2	6.15	4.81%	$0.45	$0.64	6.27%

Through a meticulous analysis of ASML Holding, we can observe the following trends:

• With a Price to Earnings ratio of 37.84, which is 0.87x 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 18.74 which exceeds the industry average by 2.6x.

• The stock's relatively high Price to Sales ratio of 11.12, surpassing the industry average by 1.81x, may indicate an aspect of overvaluation in terms of sales performance.

• The Return on Equity (ROE) of 11.61% is 6.8% above the industry average, highlighting efficient use of equity to generate profits.

• Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $2.74 Billion, which is 6.09x above the industry average, indicating stronger profitability and robust cash flow generation.

• Compared to its industry, the company has higher gross profit of $3.88 Billion, which indicates 6.06x above the industry average, indicating stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 0.65% is significantly below the industry average of 6.27%. This suggests a potential struggle in generating increased sales volume.

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.

When assessing ASML Holding against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:

• ASML Holding demonstrates a stronger financial position compared to its top 4 peers in the sector.

• With a lower debt-to-equity ratio of 0.14, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.

Key Takeaways

The PE, PB, and PS ratios for ASML Holding indicate that it may be undervalued compared to its peers in the Semiconductors & Semiconductor Equipment industry. However, the high ROE, EBITDA, gross profit, and low revenue growth suggest that the company is performing well financially and efficiently utilizing its resources. Overall, ASML Holding shows strong profitability and operational efficiency despite facing challenges in revenue growth compared to its industry peers.

This article was generated by Benzinga's automated content engine and reviewed by an editor.