Intrinsic value of ASML Holding - ASML

Previous Close

$176.59

  Intrinsic Value

$127.36

stock screener

  Rating & Target

sell

-28%

  Value-price divergence*

+6%

Previous close

$176.59

 
Intrinsic value

$127.36

 
Up/down potential

-28%

 
Rating

sell

 
Value-price divergence*

+6%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of ASML stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 76.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  8.06
  20.80
  19.22
  17.80
  16.52
  15.37
  14.33
  13.40
  12.56
  11.80
  11.12
  10.51
  9.96
  9.46
  9.02
  8.61
  8.25
  7.93
  7.63
  7.37
  7.13
  6.92
  6.73
  6.56
  6.40
  6.26
  6.13
  6.02
  5.92
  5.83
  5.74
Revenue, $m
  7,171
  8,663
  10,328
  12,166
  14,175
  16,353
  18,697
  21,202
  23,864
  26,680
  29,647
  32,763
  36,025
  39,434
  42,990
  46,693
  50,547
  54,554
  58,719
  63,048
  67,546
  72,221
  77,080
  82,133
  87,390
  92,861
  98,558
  104,492
  110,676
  117,125
  123,853
Variable operating expenses, $m
 
  6,399
  7,530
  8,778
  10,143
  11,623
  13,214
  14,916
  16,724
  18,637
  20,653
  22,255
  24,471
  26,786
  29,202
  31,717
  34,335
  37,057
  39,886
  42,826
  45,882
  49,057
  52,358
  55,790
  59,361
  63,077
  66,947
  70,978
  75,179
  79,559
  84,129
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  5,422
  6,399
  7,530
  8,778
  10,143
  11,623
  13,214
  14,916
  16,724
  18,637
  20,653
  22,255
  24,471
  26,786
  29,202
  31,717
  34,335
  37,057
  39,886
  42,826
  45,882
  49,057
  52,358
  55,790
  59,361
  63,077
  66,947
  70,978
  75,179
  79,559
  84,129
Operating income, $m
  1,750
  2,264
  2,798
  3,388
  4,032
  4,731
  5,482
  6,286
  7,140
  8,043
  8,994
  10,508
  11,555
  12,648
  13,788
  14,976
  16,212
  17,497
  18,833
  20,221
  21,664
  23,164
  24,722
  26,343
  28,029
  29,784
  31,611
  33,514
  35,498
  37,566
  39,724
EBITDA, $m
  2,124
  2,966
  3,537
  4,166
  4,854
  5,600
  6,402
  7,260
  8,172
  9,136
  10,152
  11,219
  12,336
  13,504
  14,721
  15,989
  17,309
  18,681
  20,108
  21,590
  23,130
  24,731
  26,395
  28,125
  29,926
  31,799
  33,750
  35,782
  37,900
  40,108
  42,412
Interest expense (income), $m
  59
  113
  168
  229
  297
  371
  451
  537
  629
  727
  831
  940
  1,054
  1,174
  1,299
  1,430
  1,566
  1,708
  1,855
  2,008
  2,167
  2,333
  2,505
  2,683
  2,869
  3,062
  3,263
  3,473
  3,691
  3,918
  4,155
Earnings before tax, $m
  1,785
  2,151
  2,630
  3,158
  3,735
  4,360
  5,031
  5,749
  6,510
  7,316
  8,164
  9,569
  10,500
  11,474
  12,489
  13,546
  14,646
  15,789
  16,978
  18,213
  19,497
  20,831
  22,218
  23,660
  25,160
  26,721
  28,347
  30,041
  31,807
  33,648
  35,568
Tax expense, $m
  232
  581
  710
  853
  1,008
  1,177
  1,358
  1,552
  1,758
  1,975
  2,204
  2,584
  2,835
  3,098
  3,372
  3,657
  3,954
  4,263
  4,584
  4,918
  5,264
  5,624
  5,999
  6,388
  6,793
  7,215
  7,654
  8,111
  8,588
  9,085
  9,603
Net income, $m
  1,553
  1,570
  1,920
  2,305
  2,727
  3,183
  3,673
  4,196
  4,753
  5,341
  5,960
  6,985
  7,665
  8,376
  9,117
  9,889
  10,691
  11,526
  12,394
  13,296
  14,233
  15,206
  16,219
  17,272
  18,367
  19,507
  20,694
  21,930
  23,219
  24,563
  25,965

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  4,282
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  18,160
  16,755
  19,976
  23,531
  27,418
  31,631
  36,164
  41,009
  46,158
  51,606
  57,345
  63,371
  69,682
  76,275
  83,152
  90,316
  97,769
  105,520
  113,577
  121,949
  130,649
  139,692
  149,091
  158,865
  169,033
  179,615
  190,633
  202,111
  214,074
  226,548
  239,561
Adjusted assets (=assets-cash), $m
  13,878
  16,755
  19,976
  23,531
  27,418
  31,631
  36,164
  41,009
  46,158
  51,606
  57,345
  63,371
  69,682
  76,275
  83,152
  90,316
  97,769
  105,520
  113,577
  121,949
  130,649
  139,692
  149,091
  158,865
  169,033
  179,615
  190,633
  202,111
  214,074
  226,548
  239,561
Revenue / Adjusted assets
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
Average production assets, $m
  2,834
  3,422
  4,079
  4,805
  5,599
  6,460
  7,385
  8,375
  9,426
  10,539
  11,711
  12,941
  14,230
  15,577
  16,981
  18,444
  19,966
  21,549
  23,194
  24,904
  26,681
  28,527
  30,447
  32,443
  34,519
  36,680
  38,930
  41,274
  43,717
  46,264
  48,922
Working capital, $m
  5,570
  1,871
  2,231
  2,628
  3,062
  3,532
  4,038
  4,580
  5,155
  5,763
  6,404
  7,077
  7,781
  8,518
  9,286
  10,086
  10,918
  11,784
  12,683
  13,618
  14,590
  15,600
  16,649
  17,741
  18,876
  20,058
  21,288
  22,570
  23,906
  25,299
  26,752
Total debt, $m
  3,503
  4,806
  6,555
  8,485
  10,596
  12,884
  15,345
  17,976
  20,772
  23,730
  26,846
  30,119
  33,545
  37,125
  40,860
  44,749
  48,797
  53,006
  57,380
  61,926
  66,651
  71,560
  76,664
  81,972
  87,493
  93,239
  99,222
  105,454
  111,950
  118,723
  125,790
Total liabilities, $m
  7,795
  9,098
  10,847
  12,777
  14,888
  17,176
  19,637
  22,268
  25,064
  28,022
  31,138
  34,411
  37,837
  41,417
  45,152
  49,041
  53,089
  57,298
  61,672
  66,218
  70,943
  75,852
  80,956
  86,264
  91,785
  97,531
  103,514
  109,746
  116,242
  123,015
  130,082
Total equity, $m
  10,365
  7,657
  9,129
  10,754
  12,530
  14,455
  16,527
  18,741
  21,094
  23,584
  26,207
  28,961
  31,845
  34,858
  38,001
  41,274
  44,681
  48,223
  51,905
  55,731
  59,707
  63,839
  68,135
  72,601
  77,248
  82,084
  87,119
  92,365
  97,832
  103,532
  109,479
Total liabilities and equity, $m
  18,160
  16,755
  19,976
  23,531
  27,418
  31,631
  36,164
  41,009
  46,158
  51,606
  57,345
  63,372
  69,682
  76,275
  83,153
  90,315
  97,770
  105,521
  113,577
  121,949
  130,650
  139,691
  149,091
  158,865
  169,033
  179,615
  190,633
  202,111
  214,074
  226,547
  239,561
Debt-to-equity ratio
  0.338
  0.630
  0.720
  0.790
  0.850
  0.890
  0.930
  0.960
  0.980
  1.010
  1.020
  1.040
  1.050
  1.070
  1.080
  1.080
  1.090
  1.100
  1.110
  1.110
  1.120
  1.120
  1.130
  1.130
  1.130
  1.140
  1.140
  1.140
  1.140
  1.150
  1.150
Adjusted equity ratio
  0.438
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,553
  1,570
  1,920
  2,305
  2,727
  3,183
  3,673
  4,196
  4,753
  5,341
  5,960
  6,985
  7,665
  8,376
  9,117
  9,889
  10,691
  11,526
  12,394
  13,296
  14,233
  15,206
  16,219
  17,272
  18,367
  19,507
  20,694
  21,930
  23,219
  24,563
  25,965
Depreciation, amort., depletion, $m
  374
  702
  739
  778
  822
  869
  920
  975
  1,032
  1,093
  1,158
  711
  782
  856
  933
  1,013
  1,097
  1,184
  1,274
  1,368
  1,466
  1,567
  1,673
  1,783
  1,897
  2,015
  2,139
  2,268
  2,402
  2,542
  2,688
Funds from operations, $m
  1,447
  2,272
  2,658
  3,084
  3,549
  4,052
  4,593
  5,171
  5,785
  6,434
  7,117
  7,696
  8,447
  9,232
  10,050
  10,902
  11,788
  12,710
  13,668
  14,664
  15,699
  16,774
  17,892
  19,054
  20,263
  21,522
  22,833
  24,198
  25,621
  27,105
  28,653
Change in working capital, $m
  -311
  322
  360
  397
  434
  470
  506
  541
  575
  608
  641
  673
  705
  736
  768
  800
  832
  866
  900
  935
  972
  1,010
  1,050
  1,092
  1,135
  1,182
  1,230
  1,282
  1,336
  1,393
  1,453
Cash from operations, $m
  1,758
  1,950
  2,299
  2,687
  3,115
  3,581
  4,087
  4,630
  5,210
  5,826
  6,477
  7,023
  7,742
  8,495
  9,282
  10,102
  10,956
  11,845
  12,769
  13,729
  14,727
  15,764
  16,842
  17,963
  19,128
  20,340
  21,602
  22,916
  24,285
  25,712
  27,200
Maintenance CAPEX, $m
  0
  -156
  -188
  -224
  -264
  -308
  -355
  -406
  -460
  -518
  -579
  -643
  -711
  -782
  -856
  -933
  -1,013
  -1,097
  -1,184
  -1,274
  -1,368
  -1,466
  -1,567
  -1,673
  -1,783
  -1,897
  -2,015
  -2,139
  -2,268
  -2,402
  -2,542
New CAPEX, $m
  -343
  -588
  -658
  -726
  -794
  -860
  -926
  -989
  -1,052
  -1,112
  -1,172
  -1,231
  -1,289
  -1,347
  -1,404
  -1,463
  -1,522
  -1,583
  -1,645
  -1,710
  -1,777
  -1,847
  -1,920
  -1,996
  -2,076
  -2,161
  -2,250
  -2,344
  -2,443
  -2,547
  -2,658
Cash from investing activities, $m
  -3,365
  -744
  -846
  -950
  -1,058
  -1,168
  -1,281
  -1,395
  -1,512
  -1,630
  -1,751
  -1,874
  -2,000
  -2,129
  -2,260
  -2,396
  -2,535
  -2,680
  -2,829
  -2,984
  -3,145
  -3,313
  -3,487
  -3,669
  -3,859
  -4,058
  -4,265
  -4,483
  -4,711
  -4,949
  -5,200
Free cash flow, $m
  -1,607
  1,206
  1,453
  1,737
  2,057
  2,413
  2,806
  3,235
  3,698
  4,195
  4,726
  5,149
  5,743
  6,367
  7,022
  7,706
  8,421
  9,165
  9,939
  10,745
  11,582
  12,452
  13,355
  14,294
  15,269
  16,283
  17,337
  18,433
  19,574
  20,762
  22,000
Issuance/(repayment) of debt, $m
  2,349
  1,564
  1,749
  1,931
  2,111
  2,288
  2,461
  2,631
  2,796
  2,958
  3,116
  3,272
  3,427
  3,580
  3,734
  3,890
  4,047
  4,209
  4,375
  4,546
  4,724
  4,910
  5,104
  5,307
  5,521
  5,746
  5,983
  6,232
  6,496
  6,773
  7,066
Issuance/(repurchase) of shares, $m
  193
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  2,543
  1,564
  1,749
  1,931
  2,111
  2,288
  2,461
  2,631
  2,796
  2,958
  3,116
  3,272
  3,427
  3,580
  3,734
  3,890
  4,047
  4,209
  4,375
  4,546
  4,724
  4,910
  5,104
  5,307
  5,521
  5,746
  5,983
  6,232
  6,496
  6,773
  7,066
Total cash flow (excl. dividends), $m
  944
  2,770
  3,202
  3,667
  4,167
  4,701
  5,268
  5,866
  6,494
  7,153
  7,842
  8,421
  9,169
  9,947
  10,756
  11,596
  12,468
  13,374
  14,314
  15,291
  16,306
  17,361
  18,459
  19,601
  20,790
  22,029
  23,320
  24,666
  26,070
  27,536
  29,066
Retained Cash Flow (-), $m
  -1,511
  -1,313
  -1,472
  -1,625
  -1,776
  -1,925
  -2,071
  -2,214
  -2,353
  -2,489
  -2,623
  -2,754
  -2,884
  -3,013
  -3,143
  -3,274
  -3,406
  -3,542
  -3,682
  -3,826
  -3,976
  -4,132
  -4,296
  -4,467
  -4,647
  -4,836
  -5,035
  -5,245
  -5,467
  -5,701
  -5,947
Prev. year cash balance distribution, $m
 
  4,021
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  5,478
  1,730
  2,042
  2,391
  2,776
  3,196
  3,651
  4,141
  4,664
  5,219
  5,667
  6,285
  6,934
  7,613
  8,322
  9,062
  9,831
  10,632
  11,465
  12,330
  13,229
  14,163
  15,134
  16,143
  17,193
  18,284
  19,420
  20,603
  21,835
  23,119
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  5,252
  1,584
  1,777
  1,969
  2,152
  2,320
  2,467
  2,588
  2,679
  2,736
  2,691
  2,682
  2,636
  2,556
  2,443
  2,303
  2,139
  1,958
  1,765
  1,567
  1,368
  1,175
  992
  822
  669
  533
  417
  319
  238
  174
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

ASML Holding N.V. is a holding company. The Company is a manufacturer of chip-making equipment. The Company is engaged in the development, production, marketing, selling and servicing of semiconductor equipment systems, consisting of lithography systems. The Company's products include systems, and installed base products and services. The Company's principal operations are in the Netherlands, the United States and Asia. The Company offers TWINSCAN systems, equipped with lithography system with a mercury lamp as light source (i-line), Krypton Fluoride (KrF) and Argon Fluoride (ArF) light sources for 300 millimeter processing wafers for manufacturing environments for which imaging at a small resolution is required. TWINSCAN systems also include immersion lithography systems (TWINSCAN immersion systems). The Company also offers NXE systems, which are equipped with extreme ultraviolet (EUV) light source technology. The Company offers YieldStar, a wafer metrology system.

FINANCIAL RATIOS  of  ASML Holding (ASML)

Valuation Ratios
P/E Ratio 48.9
Price to Sales 10.6
Price to Book 7.3
Price to Tangible Book
Price to Cash Flow 43.2
Price to Free Cash Flow 53.7
Growth Rates
Sales Growth Rate 8.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -12.9%
Cap. Spend. - 3 Yr. Gr. Rate 8.6%
Financial Strength
Quick Ratio 16
Current Ratio 0.1
LT Debt to Equity 31.3%
Total Debt to Equity 33.8%
Interest Coverage 31
Management Effectiveness
Return On Assets 10%
Ret/ On Assets - 3 Yr. Avg. 10.5%
Return On Total Capital 13%
Ret/ On T. Cap. - 3 Yr. Avg. 14.2%
Return On Equity 16.2%
Return On Equity - 3 Yr. Avg. 16.7%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 44.8%
Gross Margin - 3 Yr. Avg. 45.1%
EBITDA Margin 30.9%
EBITDA Margin - 3 Yr. Avg. 29.2%
Operating Margin 24.4%
Oper. Margin - 3 Yr. Avg. 23.7%
Pre-Tax Margin 24.9%
Pre-Tax Margin - 3 Yr. Avg. 23.8%
Net Profit Margin 21.7%
Net Profit Margin - 3 Yr. Avg. 21.4%
Effective Tax Rate 13%
Eff/ Tax Rate - 3 Yr. Avg. 9.8%
Payout Ratio 30.3%

ASML stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ASML stock intrinsic value calculation we used $7171 million for the last fiscal year's total revenue generated by ASML Holding. The default revenue input number comes from 2016 income statement of ASML Holding. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ASML stock valuation model: a) initial revenue growth rate of 20.8% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for ASML is calculated based on our internal credit rating of ASML Holding, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of ASML Holding.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ASML stock the variable cost ratio is equal to 75.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for ASML stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for ASML Holding.

Corporate tax rate of 27% is the nominal tax rate for ASML Holding. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ASML stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ASML are equal to 39.5%.

Life of production assets of 18.2 years is the average useful life of capital assets used in ASML Holding operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ASML is equal to 21.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $10365 million for ASML Holding - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 434.509 million for ASML Holding is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of ASML Holding at the current share price and the inputted number of shares is $76.7 billion.

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COMPANY NEWS

▶ Is ASML Holding (ASML) a Great Growth Stock?   [Oct-13-17 08:47AM  Zacks]
▶ ASML's New Machines Could Change The Future Of Chipmaking   [Sep-15-17 05:15PM  Investor's Business Daily]
▶ Is Lam Research Overvalued?   [Sep-01-17 05:41PM  Zacks]
▶ These 5 Top Stocks Are Less Than 1% From Buy Points   [Aug-31-17 07:30AM  Investor's Business Daily]
▶ Relative Strength? These 5 Top Stocks Absolutely Have It   [Aug-30-17 06:59AM  Investor's Business Daily]
▶ These 4 Chip Stocks Just Carved This 'Super Growth' Pattern; S&P 500 Futures   [Aug-28-17 06:59AM  Investor's Business Daily]
▶ ETFs with exposure to ASML Holding NV : August 14, 2017   [Aug-14-17 04:08PM  Capital Cube]
▶ ETFs with exposure to ASML Holding NV : August 3, 2017   [Aug-03-17 07:40PM  Capital Cube]
▶ ASML beats 2Q profit forecasts   [Jul-19-17 08:09PM  Associated Press]
▶ Chip-Gear Maker ASML Jumps To Record High On Q2 Beat   [12:22PM  Investor's Business Daily]
▶ Chip Equipment Maker ASML Jumps On Earnings   [05:37AM  Investor's Business Daily]
▶ Qualcomm, ASML To Kick Off Chip Earnings: Investing Action Plan   [Jul-18-17 04:47PM  Investor's Business Daily]
▶ These 6 Big-Cap Stocks Are Within 1% Of Buy Points   [Jul-14-17 12:43AM  Investor's Business Daily]
▶ Beating the Benchmark   [Jul-13-17 04:04PM  GuruFocus.com]
▶ Futures Rise Before Yellen: 3 Chip Stocks Near Buy Zone   [Jul-12-17 07:03AM  Investor's Business Daily]
▶ Indexes Mostly Revive; 3 FAANGs Consolidate, And ASML Nears An Entry   [Jul-11-17 09:58AM  Investor's Business Daily]
▶ Chip Plays Rally As Nasdaq Pulls Ahead; This Hot Sector Cools   [Jun-23-17 02:45PM  Investor's Business Daily]
▶ Three Petrobras Workers Die After Offshore Explosion   [Jun-12-17 01:13PM  TheStreet.com]
▶ Lam Surges, ASML Falls, But Chip Equipment Market Shines   [Apr-19-17 07:10PM  Barrons.com]
▶ Chip Gear Stocks Soared Today: Here's Why   [04:39PM  Investor's Business Daily]
▶ ASML tops Street 1Q forecasts   [05:28AM  Associated Press]
▶ ETFs with exposure to ASML Holding NV : April 5, 2017   [Apr-05-17 04:20PM  Capital Cube]
▶ ASML Earns Membership In 95-Plus Composite Rating Club   [Mar-13-17 03:30PM  Investor's Business Daily]
▶ Chip Gear Stocks Rocking As Investors Come Knocking   [Mar-10-17 04:45PM  Investor's Business Daily]
▶ ASML publishes 2016 annual reports   [02:01AM  GlobeNewswire]
▶ [$$] The Risks and Rewards in ASML and Applied Materials   [Jan-21-17 12:01AM  at Barrons.com]
▶ ASML etches 'remarkable' 2016 profit   [Jan-17-17 07:37PM  AFP]
▶ Is ASML Holding NV (ADR) (ASML) A Good Stock To Buy?   [Dec-12-16 10:59PM  at Insider Monkey]
▶ Should You Invest In Graphene Stocks?   [Dec-08-16 12:34PM  at Motley Fool]
▶ Do Hedge Funds Love Westlake Chemical Corporation (WLK)?   [Dec-07-16 10:54AM  at Insider Monkey]
▶ ASML completes acquisition of HMI   [Nov-22-16 02:01AM  GlobeNewswire]
▶ ASML affirms 2020 growth opportunity   [Oct-31-16 03:02AM  GlobeNewswire]
Financial statements of ASML
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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