ASML Holding (NasdaqGS:ASML): Assessing Valuation After Strong Recent Share Price Surge

ASML Holding (NasdaqGS:ASML) has caught the attention of investors lately, especially after its shares closed at $980.54. The stock has risen 22% over the past month, which has prompted curiosity about what could be driving such a strong upward move.

See our latest analysis for ASML Holding.

ASML Holding’s share price may have surged nearly 22% in the past month, but that momentum comes after a standout run this year, with a year-to-date share price return of roughly 40%. The bigger story is in the impressive long-term perspective, including a three-year total shareholder return of nearly 148%. This is clear evidence that momentum has been building, not fading, around the stock as expectations for growth remain high and the market’s risk appetite appears strong.

If you’re interested in discovering more companies riding strong performance waves, now is a perfect time to broaden your perspective with the See the full list for free.

Given ASML’s rally, investors are now weighing whether the recent gains reflect an opportunity to buy into ongoing growth or if the market has already factored future prospects into the current price, leaving little upside ahead.

Most Popular Narrative: 2% Undervalued

According to Investingwilly, the most followed narrative places ASML's fair value at $1,002.53, slightly above the recent close of $980.54. This perspective draws attention to both near-term concerns and the company's dominant long-term position, setting the scene for a deeper understanding.

ASML’s Q2 results were objectively strong, but a cautious tone on the near-term outlook spooked investors. However, this creates an opportunity for long-term investors.

Read the complete narrative.

What makes this fair value possible? Hints: the narrative leans on persistent profit growth, a unique tech advantage, and bold assumptions about future margins. Want to know the full set of financial bets behind Investingwilly’s call? Get the details that are stirring up bullish sentiment and see which numbers made the difference.

Result: Fair Value of $1,002.53 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent macroeconomic uncertainty and potential trade restrictions could challenge ASML’s bullish outlook and reduce long-term investor enthusiasm.

Find out about the key risks to this ASML Holding narrative.

Another View: The DCF Model Offers Caution

While the most followed narrative values ASML shares slightly above market, our SWS DCF model tells a different story. By projecting future cash flows, the DCF suggests ASML may actually be overvalued at current levels. This challenges the bullish outlook and raises the question: could the market be glossing over some risk?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out ASML Holding for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own ASML Holding Narrative

If you want to dig deeper or trust your own judgement above all, you can explore the numbers yourself and shape your own perspective. Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding ASML Holding.

Ready for More Smart Investment Ideas?

Take your investing to the next level. Exceptional opportunities await if you look beyond ASML. Don’t miss out while others are spotting the next big movers.

• Unlock the potential of aggressive price growth by tapping into these 3575 penny stocks with strong financials, which combine strong financials with market excitement and volatility.
• Catch the next surge in artificial intelligence by reviewing these 25 AI penny stocks, powering tomorrow’s breakthroughs in automation and smart solutions.
• Supercharge your income with these 18 dividend stocks with yields > 3%, featuring reliable yields above 3% and a record of rewarding shareholders.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com