Understanding how ASML Holding N.V. (ENXTAM:ASML) is performing as a company requires looking at more than just a years’ earnings. Today I will run you through a basic sense check to gain perspective on how ASML Holding is doing by comparing its latest earnings with its long-term trend as well as the performance of its semiconductor industry peers.
How Did ASML’s Recent Performance Stack Up Against Its Past?
ASML’s trailing twelve-month earnings (from 30 June 2019) of €2.3b has increased by 1.3% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 12%, indicating the rate at which ASML is growing has slowed down. Why could this be happening? Well, let’s look at what’s transpiring with margins and if the whole industry is feeling the heat.
In terms of returns from investment, ASML Holding has fallen short of achieving a 20% return on equity (ROE), recording 20% instead. However, its return on assets (ROA) of 12% exceeds the NL Semiconductor industry of 5.3%, indicating ASML Holding has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for ASML Holding’s debt level, has increased over the past 3 years from 15% to 15%.
What does this mean?
ASML Holding’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research ASML Holding to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for ASML’s future growth? Take a look at our free research report of analyst consensus for ASML’s outlook.
- Financial Health: Are ASML’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 June 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.