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Assessing ASML Holding N.V.'s (AMS:ASML) performance as a company requires looking at more than just a years' earnings data. Below, I will run you through a simple sense check to build perspective on how ASML Holding is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its semiconductor industry peers.
How Well Did ASML Perform?
ASML's trailing twelve-month earnings (from 31 March 2019) of €2.4b has jumped 12% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 12%, indicating the rate at which ASML is growing has accelerated. What's the driver of this growth? Well, let’s take a look at if it is only because of an industry uplift, or if ASML Holding has seen some company-specific growth.
In terms of returns from investment, ASML Holding has invested its equity funds well leading to a 20% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 12% exceeds the NL Semiconductor industry of 5.6%, 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 14% to 16%.
What does this mean?
Though ASML Holding's past data is helpful, it is only one aspect of my investment thesis. While ASML Holding has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research ASML Holding to get a better picture 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 31 March 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 firstname.lastname@example.org. 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.