ASML HOLDING NV (ASML): what the price requires
At today's price, ASML HOLDING NV (ASML) is priced for today's economics sustained for ~17.0 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Source: https://boothcheck.com/report/ASML
Headline
| Field | Value |
|---|---|
| Ticker | ASML |
| Company | ASML HOLDING NV |
| Current price | $1728.91/sh |
| Composition | Japan 4% / South Korea 25% / Singapore 2% / Taiwan 26% / China 29% / Rest of Asia 0% / Netherlands 0% / EMEA 2% / United States 13% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin today | 34.6% |
| Must persist for | 17.0y |
| Multiple paid | 52x operating income |
Solve inputs: computed at a 12.3% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2.5 years.
Reconcile: at the x-ray's 9.3% required return this reads ~10.1 years; the models below use their own rates.
How unusual the bet is: high
| Reference | Value |
|---|---|
| cohort percentile (of 225 peers) | 92 |
| sustained it ~10 years at this level | 14% |
| implied end-window share | 2% |
Valuation X-Ray
Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 3.69x | 5 | expensive |
| Earnings | 5.39x | 4 | expensive |
| Relative | 3.95x | 5 | expensive |
| Growth | 1.58x | 3 | expensive |
Families that call it expensive: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=17)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $975.39 | 1.77x | yes | FCF base $14.0B, growth 16% (input: historical growth), terminal g 4.0%, WACC 9.2%, 6yr projection |
| DCF Exit Multiple | Growth | $1931.41 | 0.90x | yes | Exit EV/EBITDA: 47.5x / 49.5x / 51.5x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $907.53 | 1.91x | yes | P/E 31.91x (blended: static sector reference 18x + trailing (TTM) 64x), scenarios: 26.1x / 31.9x / 37.7x (bear / base = reference held flat / bull), EV/EBITDA 23.25x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $290.35 | 5.95x | yes | BV/sh $54.82, ROE (TTM) 49.0%, ke 9.3% |
| Two-Stage Excess Return | Asset | $806.85 | 2.14x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $1094.21 | 1.58x | yes | Rev $35.5B, growth 16% (input: historical growth; tapered), Terminal P/S: 9.8x / 12.0x / 14.2x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $432.84 | 3.99x | yes | EPS $26.86, growth 16% (input: historical EPS growth), PEG=3.99 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $228.63 | 7.56x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $9.28B × (1−21%) / WACC 9.2% → EPV (no growth) |
| Residual Income | Asset | $469.08 | 3.69x | yes | BV $54.82 + 5yr PV of (ROE (TTM) 49.0% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $182.01 | 9.50x | yes | √(22.5 × EPS $26.86 × BVPS $54.82) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $437.28 | 3.95x | yes | EBITDA $13.40B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $358.77 | 4.82x | yes | FCF $12048.8M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $866.64 | 1.99x | yes | EPS $26.86 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $479.80 | 3.60x | yes | BV $54.82 × (ROIC 80.5% / WACC 9.2%) |
| P/Sales Sector | Relative | $228.26 | 7.57x | yes | Revenue $35.51B × sector P/S 2.5x |
| PEG Fair Value | Relative | $649.26 | 2.66x | yes | EPS $26.86 × (PEG 1.5 × growth 16.1% (input: historical EPS growth)) → PE 24.2x |
| Earnings Yield | Earnings | $290.36 | 5.95x | yes | EPS $26.86 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $10.0b |
| Net debt / NOPAT (after-tax) | -0.98x (net cash) |
| Net debt / operating income (pre-tax) | -0.78x (net cash) |
| Interest coverage | 95.5x |
| Share count CAGR (buyback) | -1.3% |
| Burning cash | no |
Bullet Takeaways
- ASML is the sole maker of extreme-ultraviolet lithography machines, the equipment required to print the most advanced computer chips, which is why it earns an operating margin above 30% with no direct competitor.
- Demand is being pulled by artificial intelligence: Q1 2026 net sales were 8.8 billion euros, up 13%, and the company raised its full-year revenue guidance, sitting on a backlog of 38.8 billion euros at the end of 2025.
- The price is the entire debate: at about $1,929 a share the stock trades near 58 times operating income, a level no standard valuation method reaches and one that requires nearly two decades of sustained growth.
Bull Case
Valuing ASML starts with understanding what makes it unlike any other industrial company: it is a genuine monopoly on the tool that makes modern computing possible. Extreme-ultraviolet lithography is the only way to print the smallest features on a leading-edge chip, and ASML is the only company on earth that builds an EUV machine. The filing describes a product portfolio "aligned to our customers' roadmaps, delivering holistic lithography", with the EUV light source receiving "significant focus in our engineering efforts". The result is pricing power and a 53% gross margin that a normal capital-equipment maker could never approach. When the world's chipmakers want to advance to the next node, they have exactly one supplier, and that supplier sets the terms.
The demand cycle is being driven by the largest technology buildout in a generation. Artificial intelligence requires enormous quantities of advanced logic and memory, and every one of those chips runs through ASML's machines. Q1 2026 net sales were 8.8 billion euros, up 13%, with net system sales of 6.3 billion euros including 4.1 billion from EUV systems and two of the next-generation High-NA tools. The company raised its full-year 2026 revenue guidance to a 36 to 40 billion euro range, citing stronger demand concentrated outside China.
The backlog and the installed base give the story unusual durability. Year-end 2025 backlog stood at 38.8 billion euros, more than a full year of revenue already booked, and Q4 net bookings were 13.2 billion euros, including 7.4 billion of EUV. Beyond selling machines, ASML earns high-margin recurring revenue servicing the thousands of systems already in the field, a stream that grows with every tool shipped. With roughly 9 billion euros of net cash and interest covered dozens of times over, the balance sheet is fortress-grade. The bull case is a true monopoly on an essential technology, riding the AI capital cycle, with a booked backlog and a recurring service annuity underneath the equipment sales.
Bear Case
The monopoly is real, but the thing most likely to erode the thesis is not a competitor; it is geopolitics, and the company's own filing is unusually direct about it. ASML warns that countries affected by export-control restrictions "may also introduce countermeasures, which could result in conflicting regulations and legal liabilities," and that "the timing of subsidies and the risk of restrictions make forecasting market demand less predictable". China has been roughly a fifth of revenue, but that share is volatile: it fell to 19% of system sales in Q1 2026 from 36% the prior quarter as export rules and the digestion of earlier orders bit. A single government decision, in The Hague, Washington, or Beijing, can subtract a chunk of ASML's addressable market overnight, in a way no industrial moat can defend against.
The second erosion risk is cyclicality dressed up as secular growth. Semiconductor capital spending is one of the most cyclical end markets in the economy, and ASML sits at the top of it: chipmakers order machines in waves tied to their own capacity plans, and when they pause, ASML's bookings can fall sharply for several quarters. The AI buildout is powering an upcycle now, but the same concentration that makes the current numbers spectacular makes the eventual downcycle severe. A backlog is a comfort only until customers push out or cancel deliveries, which they do when their own demand softens.
The High-NA transition is the subtler technical risk. The next-generation tool is enormously expensive and adoption is still early, with only a handful shipped; if customers find they can stretch the existing EUV generation longer than expected, or if High-NA yields disappoint, the upgrade cycle the price is partly counting on slows. And the price leaves no room for any of this. At about $1,929 a share, ASML trades near 58 times operating income, at the very top of its peer distribution and well beyond, implying growth held near the firm's ceiling for nearly two decades, a feat only about one in seven comparable fast-growers has sustained for even one. No standard valuation method reaches the price. A monopoly is worth a premium; the bear case is that this premium prices the monopoly as if the cycle, the geopolitics, and the technical transition all break ASML's way for twenty years.
Valuation
The price is making one of the most demanding bets in the market, and the inversion states it plainly. At about $1,929 a share, ASML trades near 58 times company-wide operating income, which implies growth held near the firm's self-funding ceiling for roughly 18 years. Keep that figure approximate; it is one solve under fixed assumptions. The point it makes is unambiguous: the multiple sits at the very top of its peer distribution, well beyond the upper quartile, and requires the kind of sustained growth only about 14% of comparable fast-growers have managed for even a decade. This is a price paying for monopoly economics extended almost indefinitely.
No family of valuation method reaches the price, which is the signature of a pure premium. The asset family, anchored on a book value near $55 a share against a remarkable 49% return on equity, lands far below at $290 to $807. The earnings-power and peer-multiple families land near $228 to $972. Even the forward-growth family, which credits high growth, only reaches the price through the most aggressive exit-multiple assumption, with the cash-flow growth method landing near $974. When every backward-looking frame says expensive and even the growth frames mostly fall short, the price is a bet beyond what any standard method supports, a durability premium on the monopoly that the static methods structurally cannot price.
The balance sheet is not the question; the durability of the premium is. Net cash of roughly 9 billion euros and interest coverage in the dozens mean solvency is irrelevant to the downside here. What matters is whether the AI-driven semiconductor capital cycle and the EUV upgrade path can sustain the growth the price embeds for the better part of two decades. The decisive question the buyer is answering is not whether ASML is an extraordinary business, it plainly is, but whether even an extraordinary, monopoly business can grow into 58 times operating income against the gravity of cyclicality and export politics.
Catalysts
The first quarter of 2026 beat and prompted a guidance raise. Net sales were 8.8 billion euros, up 13% year over year, with net income of 2.8 billion euros at a 31.4% margin and earnings per share of 7.15 euros. Net system sales of 6.3 billion euros included 4.1 billion from EUV systems, with two High-NA tools, and a 53% gross margin at the high end of guidance. ASML raised its full-year 2026 revenue range to 36 to 40 billion euros, citing stronger immersion demand and EUV upside concentrated in non-China customers.
The forward catalysts are the AI capital cycle, the China trajectory, and High-NA adoption. China is expected to stay around 20% of revenue but fell to 19% of system sales in the quarter from 36% the prior quarter, a swing worth watching as export rules evolve. The year-end 2025 backlog of 38.8 billion euros and Q4 net bookings of 13.2 billion, including 7.4 billion of EUV, are the leading indicators of the next several quarters. The metrics to track are the bookings trend as a tell on the cycle, the pace of High-NA shipments and customer adoption, and any change in export-control policy that would alter the China contribution.
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- LRCX (LAM RESEARCH CORPORATION)
- (no filing in the citation store)
- AMAT (APPLIED MATERIALS INC /DE)
- (no filing in the citation store)
- KLAC (KLA CORPORATION)
- (no filing in the citation store)
- ACLS (AXCELIS TECHNOLOGIES INC)
- (no filing in the citation store)
- ACMR (ACM Research, Inc.)
- (no filing in the citation store)
- VECO (VEECO INSTRUMENTS INC.)
- (no filing in the citation store)
- TER (TERADYNE, INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q1 2026 results, April 2026 · FY2025 20-F · company financials