ASML Q4 Earnings Preview: ASML Up 18.2% Since Last Report

in EARNINGS/INVESTING IDEAS by

ASML Holding N.V. (NASDAQGS:ASML) is scheduled to report Q4 earnings results Wednesday, January 22, 2020, at 7:00 CET. The conference call is scheduled for 11:00 CET with CEO Peter Wennink and CFO Roger Dassen.

The company is expected to report earnings of $3.03/share on revenue of $4.379 billion. The consensus earnings per share (EPS) of $3.03/share is based on a poll of 13 analysts and represents a growth of 42.1% over the same quarter last year when the company reported earnings of $2.13/share.

The revenue forecast of $4.379 billion based on a poll of 16 analysts implies a year-over-year (YoY) growth of 21.6%. Last year the company reported $3.6 billion in revenue for the quarter.

Expected to report EPS growth of $0.90/share for Q4, 2019
Metric Expected Prior Year YoY Change
Revenue $4,378.58 $3,600.07 21.6%
EPS $3.03 $2.13 42.1%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from ASML for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q3, 2019 $1.56 $1.62 4.2% Beat
Q2, 2019 $1.08 $1.28 18.9% Beat
Q1, 2019 $0.53 $0.94 78.7% Beat
Q4, 2018 $2.04 $2.13 4.5% Beat
Q3, 2018 $1.84 $1.86 0.9% Beat
Q2, 2018 $1.41 $1.60 13.7% Beat
Q1, 2018 $1.44 $1.55 8.2% Beat
Q4, 2017 $1.26 $1.79 41.9% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending September 29, 2019, the stock price reacted by falling by -5.2%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-10-16 $267.54 $253.76 -5.2% Decline
2019-07-17 $205 $226.65 10.6% Increase
2019-04-17 $203.62 $205.91 1.1% Increase
2019-01-23 $159.50 $168.90 5.9% Increase

Fundamentals And Technical Analysis

ASML is currently trading at $300.04/share, down -0.3% for the day. The company is trading at approximately 98.1% of its 52-week high of $305.90/share. The company’s stock price is up 18.2% since the last earnings report and down -0.5% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 63.46 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

NASDAQGS:ASML Stock Price Chart Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 50.6x and a forward P/E multiple of 43.9x. ASML’s current share price also implies a price-to-book (P/B) multiple of 9.4x. The following table summarizes some other key fundamental ratios:

Data as of January 20, 2020
Metric Value
Last Fiscal Period FY2019.Q3
Period End Date September 29, 2019
Stock Price (Current) $300.04
P/E Ratio 50.6x
P/E Ratio (Fwd) 43.9x
PEG Ratio 1.1
Total Debt to Capital (%) 2.7%
Levered Free Cash Flow $744.8 million
Enterprise Value / EBITDA 42.8x

Source: Finbox

Company Profile: ASML Holding N.V.

ASML Holding N.V. is a large-cap stock with a market capitalization of $126 billion and a total enterprise value of $127.3 billion. The company operates in the Information Technology sector and the Semiconductors & Semiconductor Equipment industry.

ASML Holding N.V. develops, produces, markets sells, and services advanced semiconductor equipment systems consisting of lithography related systems primarily in the Netherlands, the United States, and Asia. It sells Holistic Lithography solutions, which integrate its three categories of products, including DUV lithography, EUV lithography, and Applications.

The company offers TWINSCAN N)XT (DUV) systems for imaging wafers, which consists of systems that operate at a specific wavelength of the light source, such as i-line, krypton fluoride, and argon fluoride. It also provides TWINSCAN NXE (EUV) lithography systems, which are equipped with new EUV light source technology and new optical technology that uses reflective mirrors rather than the traditional lenses; and scanner products with applications portfolio of software and metrology and inspection products.

The company was formerly known as ASM Lithography Holding N.V. and changed its name to ASML Holding N.V. in 2001. ASML Holding N.V. was founded in 1984 and is headquartered in Veldhoven, the Netherlands.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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