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ASML (ASML) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, ASML (ASML) closed at $489.91, marking a +1.22% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.13%. Elsewhere, the Dow gained 0.24%, while the tech-heavy Nasdaq added 0.15%.

Prior to today's trading, shares of the equipment supplier to semiconductor makers had gained 7.74% over the past month. This has outpaced the Computer and Technology sector's gain of 4.54% and the S&P 500's gain of 2.59% in that time.

ASML will be looking to display strength as it nears its next earnings release, which is expected to be January 20, 2021. The company is expected to report EPS of $2.91, down 2.35% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $4.38 billion, down 2.04% from the year-ago period.

ASML's full-year Zacks Consensus Estimates are calling for earnings of $9.21 per share and revenue of $15.73 billion. These results would represent year-over-year changes of +33.67% and +18.55%, respectively.

It is also important to note the recent changes to analyst estimates for ASML. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.21% higher. ASML currently has a Zacks Rank of #2 (Buy).

Digging into valuation, ASML currently has a Forward P/E ratio of 52.55. This valuation marks a premium compared to its industry's average Forward P/E of 19.89.

Investors should also note that ASML has a PEG ratio of 2.55 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Semiconductor Equipment - Wafer Fabrication was holding an average PEG ratio of 1.72 at yesterday's closing price.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 19, putting it in the top 8% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow ASML in the coming trading sessions, be sure to utilize Zacks.com.


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