What Are Analysts Saying About ASML Holding NV’s (ASML) Future?
Simply Wall St
September 17, 2017
ASML Holding NV (NASDAQ:ASML)’s impressive earnings growth per share is expected to be a big double-digit 76.23% over the next three years. With the recent EPS of €4.42, expected growth will push next year’s upcoming EPS to around €8.75. A positive earnings growth may please investors on the surface, but it’s important to compare this expectation to ASML’s track record. This will give investors context as to whether the growth prospect is justified and bolstered by past trends. To assess the reasonability of ASML’s earnings growth per share, we should look at its most recent growth rate delivered. See our latest analysis for ASML
Exciting times ahead for ASML
According to the analysts covering the company the next three years should bring some good growth prospects for ASML Holding N.V. We are expecting to see the earnings grow around 76.2% and earnings per share estimates range from €4.1 to €9.8. This implies a range of around -7% to 122%. In the same period revenue is expected to increase from €7.77 Billion to €11.66 Billion in 2020 and profit is predicted to grow from €1.89 Billion to €3.50 Billion in 2020, roughly growing 1.8x. Given this future level of revenue and earnings, margins are expected to be extremely healthy.
Basis for the growth
The past can be an insightful indicator for future performance for a stock. We can determine whether this level of expected growth is highly excessive or whether the company has consistently exhibited strength. ASML’s earnings growth in the last five years was a unexciting 5.36%, indicating a relatively more upbeat attitude towards the company in the upcoming year. This belief may be supported by turnaround initiatives implemented in the past or previous investments coming to fruition.
On the whole, ASML looks like it is well-placed to deliver solid growth in the upcoming years, supported by analysts’ optimistic growth projections. However, in order to determine whether this bullish sentiment is yet to be accounted for by the market, we also need to see if it is undervalued. As Warren Buffett’s right-hand man Charlie Munger said, “No matter how wonderful a business is, it’s not worth an infinite price“. Is ASML an undervalued gem? Let’s find out in this free analysis report. If you are not interested in ASML anymore, you can use our free platform to see my list of over 150 other stocks with a high growth potential.