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Let's talk about the popular ASML Holding N.V. (AMS:ASML). The company's shares saw a decent share price growth of 19% on the ENXTAM over the last few months. While good news for shareholders, the company has traded much higher in the past year. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine ASML Holding’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for ASML Holding
What's The Opportunity In ASML Holding?
The stock seems fairly valued at the moment according to our valuation model. It’s trading around 10% below our intrinsic value, which means if you buy ASML Holding today, you’d be paying a reasonable price for it. And if you believe the company’s true value is €817.69, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since ASML Holding’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from ASML Holding?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. ASML Holding's earnings over the next few years are expected to increase by 72%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? It seems like the market has already priced in ASML’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on ASML, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.