Intrinsic value of ASML Holding - ASML

Previous Close

$176.79

  Intrinsic Value

$605.45

stock screener

  Rating & Target

str. buy

+242%

Previous close

$176.79

 
Intrinsic value

$605.45

 
Up/down potential

+242%

 
Rating

str. buy

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 0001), $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 75.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  51.90
  47.21
  42.99
  39.19
  35.77
  32.69
  29.92
  27.43
  25.19
  23.17
  21.35
  19.72
  18.25
  16.92
  15.73
  14.66
  13.69
  12.82
  12.04
  11.34
  10.70
  10.13
  9.62
  9.16
  8.74
  8.37
  8.03
  7.73
  7.45
  7.21
Revenue, $m
  16,508
  24,301
  34,748
  48,366
  65,668
  87,137
  113,212
  144,269
  180,609
  222,456
  269,957
  323,186
  382,154
  446,820
  517,101
  592,889
  674,060
  760,485
  852,043
  948,627
  1,050,148
  1,156,546
  1,267,790
  1,383,878
  1,504,843
  1,630,752
  1,761,706
  1,897,837
  2,039,311
  2,186,326
Variable operating expenses, $m
  10,655
  15,362
  21,672
  29,896
  40,346
  53,312
  69,061
  87,817
  109,765
  135,039
  163,042
  195,191
  230,805
  269,860
  312,307
  358,080
  407,104
  459,301
  514,598
  572,930
  634,245
  698,505
  765,691
  835,803
  908,861
  984,905
  1,063,996
  1,146,213
  1,231,657
  1,320,448
Fixed operating expenses, $m
  764
  781
  798
  816
  834
  852
  871
  890
  910
  930
  950
  971
  993
  1,014
  1,037
  1,060
  1,083
  1,107
  1,131
  1,156
  1,181
  1,207
  1,234
  1,261
  1,289
  1,317
  1,346
  1,376
  1,406
  1,437
Total operating expenses, $m
  11,419
  16,143
  22,470
  30,712
  41,180
  54,164
  69,932
  88,707
  110,675
  135,969
  163,992
  196,162
  231,798
  270,874
  313,344
  359,140
  408,187
  460,408
  515,729
  574,086
  635,426
  699,712
  766,925
  837,064
  910,150
  986,222
  1,065,342
  1,147,589
  1,233,063
  1,321,885
Operating income, $m
  5,088
  8,158
  12,278
  17,654
  24,488
  32,972
  43,281
  55,561
  69,934
  86,487
  105,964
  127,024
  150,357
  175,945
  203,757
  233,750
  265,873
  300,078
  336,314
  374,540
  414,722
  456,834
  500,865
  546,813
  594,693
  644,530
  696,364
  750,248
  806,248
  864,441
EBITDA, $m
  6,238
  9,526
  13,940
  19,699
  27,020
  36,108
  47,149
  60,303
  75,697
  93,427
  113,555
  136,111
  161,102
  188,509
  218,297
  250,420
  284,826
  321,461
  360,272
  401,214
  444,249
  489,353
  536,512
  585,725
  637,005
  690,383
  745,899
  803,611
  863,588
  925,915
Interest expense (income), $m
  59
  196
  448
  797
  1,265
  1,875
  2,649
  3,611
  4,779
  6,169
  7,797
  9,671
  11,798
  14,182
  16,823
  19,719
  22,866
  26,260
  29,895
  33,766
  37,866
  42,191
  46,738
  51,502
  56,484
  61,683
  67,100
  72,739
  78,603
  84,700
  91,035
Earnings before tax, $m
  4,892
  7,710
  11,481
  16,389
  22,613
  30,323
  39,670
  50,783
  63,764
  78,690
  96,293
  115,226
  136,175
  159,123
  184,039
  210,884
  239,613
  270,183
  302,549
  336,675
  372,531
  410,097
  449,362
  490,329
  533,010
  577,430
  623,625
  671,645
  721,548
  773,405
Tax expense, $m
  1,321
  2,082
  3,100
  4,425
  6,106
  8,187
  10,711
  13,711
  17,216
  21,246
  25,999
  31,111
  36,767
  42,963
  49,690
  56,939
  64,696
  72,949
  81,688
  90,902
  100,583
  110,726
  121,328
  132,389
  143,913
  155,906
  168,379
  181,344
  194,818
  208,819
Net income, $m
  3,571
  5,628
  8,381
  11,964
  16,508
  22,136
  28,959
  37,071
  46,548
  57,444
  70,294
  84,115
  99,408
  116,160
  134,348
  153,945
  174,918
  197,233
  220,861
  245,772
  271,947
  299,370
  328,034
  357,940
  389,097
  421,524
  455,246
  490,301
  526,730
  564,586

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  33,149
  48,798
  69,776
  97,121
  131,863
  174,974
  227,334
  289,697
  362,668
  446,698
  542,082
  648,968
  767,378
  897,229
  1,038,356
  1,190,541
  1,353,534
  1,527,079
  1,710,930
  1,904,873
  2,108,731
  2,322,382
  2,545,762
  2,778,871
  3,021,773
  3,274,603
  3,537,562
  3,810,917
  4,095,002
  4,390,213
Adjusted assets (=assets-cash), $m
  33,149
  48,798
  69,776
  97,121
  131,863
  174,974
  227,334
  289,697
  362,668
  446,698
  542,082
  648,968
  767,378
  897,229
  1,038,356
  1,190,541
  1,353,534
  1,527,079
  1,710,930
  1,904,873
  2,108,731
  2,322,382
  2,545,762
  2,778,871
  3,021,773
  3,274,603
  3,537,562
  3,810,917
  4,095,002
  4,390,213
Revenue / Adjusted assets
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
Average production assets, $m
  7,891
  11,616
  16,610
  23,119
  31,389
  41,651
  54,116
  68,961
  86,331
  106,334
  129,039
  154,483
  182,670
  213,580
  247,174
  283,401
  322,201
  363,512
  407,277
  453,443
  501,971
  552,829
  606,003
  661,494
  719,315
  779,500
  842,095
  907,166
  974,791
  1,045,064
Working capital, $m
  4,375
  6,440
  9,208
  12,817
  17,402
  23,091
  30,001
  38,231
  47,861
  58,951
  71,539
  85,644
  101,271
  118,407
  137,032
  157,116
  178,626
  201,529
  225,791
  251,386
  278,289
  306,485
  335,964
  366,728
  398,783
  432,149
  466,852
  502,927
  540,417
  579,376
Total debt, $m
  8,294
  14,758
  23,421
  34,715
  49,063
  66,868
  88,493
  114,249
  144,386
  179,090
  218,484
  262,628
  311,531
  365,160
  423,445
  486,297
  553,613
  625,287
  701,218
  781,316
  865,510
  953,748
  1,046,004
  1,142,278
  1,242,596
  1,347,015
  1,455,617
  1,568,513
  1,685,840
  1,807,762
Total liabilities, $m
  13,690
  20,154
  28,818
  40,111
  54,459
  72,264
  93,889
  119,645
  149,782
  184,486
  223,880
  268,024
  316,927
  370,556
  428,841
  491,693
  559,009
  630,683
  706,614
  786,712
  870,906
  959,144
  1,051,400
  1,147,674
  1,247,992
  1,352,411
  1,461,013
  1,573,909
  1,691,236
  1,813,158
Total equity, $m
  19,458
  28,645
  40,959
  57,010
  77,403
  102,710
  133,445
  170,052
  212,886
  262,212
  318,202
  380,944
  450,451
  526,674
  609,515
  698,847
  794,524
  896,395
  1,004,316
  1,118,160
  1,237,825
  1,363,238
  1,494,363
  1,631,197
  1,773,781
  1,922,192
  2,076,549
  2,237,008
  2,403,766
  2,577,055
Total liabilities and equity, $m
  33,148
  48,799
  69,777
  97,121
  131,862
  174,974
  227,334
  289,697
  362,668
  446,698
  542,082
  648,968
  767,378
  897,230
  1,038,356
  1,190,540
  1,353,533
  1,527,078
  1,710,930
  1,904,872
  2,108,731
  2,322,382
  2,545,763
  2,778,871
  3,021,773
  3,274,603
  3,537,562
  3,810,917
  4,095,002
  4,390,213
Debt-to-equity ratio
  0.430
  0.520
  0.570
  0.610
  0.630
  0.650
  0.660
  0.670
  0.680
  0.680
  0.690
  0.690
  0.690
  0.690
  0.690
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
Adjusted equity ratio
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,571
  5,628
  8,381
  11,964
  16,508
  22,136
  28,959
  37,071
  46,548
  57,444
  70,294
  84,115
  99,408
  116,160
  134,348
  153,945
  174,918
  197,233
  220,861
  245,772
  271,947
  299,370
  328,034
  357,940
  389,097
  421,524
  455,246
  490,301
  526,730
  564,586
Depreciation, amort., depletion, $m
  1,149
  1,368
  1,662
  2,045
  2,532
  3,135
  3,868
  4,742
  5,763
  6,940
  7,591
  9,087
  10,745
  12,564
  14,540
  16,671
  18,953
  21,383
  23,957
  26,673
  29,528
  32,519
  35,647
  38,911
  42,313
  45,853
  49,535
  53,363
  57,341
  61,474
Funds from operations, $m
  4,721
  6,997
  10,044
  14,009
  19,039
  25,271
  32,827
  41,813
  52,311
  64,384
  77,885
  93,202
  110,153
  128,723
  148,888
  170,616
  193,871
  218,616
  244,818
  272,446
  301,475
  331,890
  363,682
  396,852
  431,410
  467,377
  504,781
  543,663
  584,071
  626,060
Change in working capital, $m
  1,495
  2,065
  2,768
  3,609
  4,585
  5,689
  6,910
  8,230
  9,630
  11,089
  12,588
  14,106
  15,627
  17,136
  18,625
  20,084
  21,510
  22,903
  24,263
  25,595
  26,903
  28,196
  29,479
  30,763
  32,056
  33,366
  34,703
  36,075
  37,491
  38,959
Cash from operations, $m
  3,226
  4,932
  7,275
  10,400
  14,455
  19,582
  25,917
  33,583
  42,681
  53,294
  65,297
  79,096
  94,526
  111,587
  130,263
  150,532
  172,361
  195,714
  220,555
  246,851
  274,572
  303,694
  334,202
  366,088
  399,354
  434,011
  470,079
  507,589
  546,580
  587,101
Maintenance CAPEX, $m
  -305
  -464
  -683
  -977
  -1,360
  -1,846
  -2,450
  -3,183
  -4,057
  -5,078
  -6,255
  -7,591
  -9,087
  -10,745
  -12,564
  -14,540
  -16,671
  -18,953
  -21,383
  -23,957
  -26,673
  -29,528
  -32,519
  -35,647
  -38,911
  -42,313
  -45,853
  -49,535
  -53,363
  -57,341
New CAPEX, $m
  -2,698
  -3,725
  -4,994
  -6,509
  -8,270
  -10,262
  -12,464
  -14,845
  -17,370
  -20,003
  -22,705
  -25,444
  -28,187
  -30,910
  -33,594
  -36,227
  -38,799
  -41,311
  -43,765
  -46,167
  -48,527
  -50,858
  -53,174
  -55,490
  -57,821
  -60,185
  -62,596
  -65,071
  -67,625
  -70,273
Cash from investing activities, $m
  -3,003
  -4,189
  -5,677
  -7,486
  -9,630
  -12,108
  -14,914
  -18,028
  -21,427
  -25,081
  -28,960
  -33,035
  -37,274
  -41,655
  -46,158
  -50,767
  -55,470
  -60,264
  -65,148
  -70,124
  -75,200
  -80,386
  -85,693
  -91,137
  -96,732
  -102,498
  -108,449
  -114,606
  -120,988
  -127,614
Free cash flow, $m
  222
  742
  1,598
  2,914
  4,825
  7,473
  11,003
  15,555
  21,254
  28,213
  36,336
  46,062
  57,252
  69,931
  84,105
  99,766
  116,890
  135,449
  155,407
  176,727
  199,371
  223,308
  248,509
  274,951
  302,621
  331,513
  361,630
  392,983
  425,593
  459,488
Issuance/(repayment) of debt, $m
  4,663
  6,463
  8,664
  11,294
  14,348
  17,805
  21,625
  25,756
  30,137
  34,704
  39,393
  44,144
  48,903
  53,628
  58,285
  62,852
  67,316
  71,674
  75,931
  80,098
  84,194
  88,238
  92,256
  96,274
  100,319
  104,419
  108,602
  112,896
  117,327
  121,922
Issuance/(repurchase) of shares, $m
  3,070
  3,558
  3,933
  4,088
  3,885
  3,170
  1,776
  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  
  7,733
  10,021
  12,597
  15,382
  18,233
  20,975
  23,401
  25,756
  30,137
  34,704
  39,393
  44,144
  48,903
  53,628
  58,285
  62,852
  67,316
  71,674
  75,931
  80,098
  84,194
  88,238
  92,256
  96,274
  100,319
  104,419
  108,602
  112,896
  117,327
  121,922
Total cash flow (excl. dividends), $m
  7,955
  10,763
  14,195
  18,295
  23,058
  28,448
  34,404
  41,310
  51,392
  62,918
  75,730
  90,206
  106,156
  123,560
  142,391
  162,618
  184,206
  207,123
  231,338
  256,825
  283,565
  311,546
  340,765
  371,225
  402,940
  435,932
  470,232
  505,879
  542,920
  581,410
Retained Cash Flow (-), $m
  -6,642
  -9,186
  -12,314
  -16,052
  -20,393
  -25,306
  -30,735
  -36,607
  -42,834
  -49,326
  -55,990
  -62,742
  -69,507
  -76,222
  -82,842
  -89,332
  -95,677
  -101,871
  -107,921
  -113,844
  -119,665
  -125,413
  -131,124
  -136,835
  -142,584
  -148,411
  -154,357
  -160,460
  -166,758
  -173,289
Prev. year cash balance distribution, $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 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
  1,313
  1,577
  1,881
  2,243
  2,665
  3,142
  3,669
  4,704
  8,557
  13,592
  19,740
  27,464
  36,649
  47,337
  59,549
  73,286
  88,530
  105,253
  123,417
  142,981
  163,900
  186,133
  209,640
  234,390
  260,356
  287,521
  315,875
  345,419
  376,162
  408,121
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
  1,259
  1,444
  1,637
  1,847
  2,066
  2,280
  2,479
  2,940
  4,916
  7,126
  9,374
  11,720
  13,935
  15,892
  17,483
  18,623
  19,263
  19,383
  19,003
  18,169
  16,953
  15,444
  13,740
  11,938
  10,128
  8,388
  6,780
  5,344
  4,106
  3,073
Current shareholders' claim on cash, %
  96.1
  93.2
  91.0
  89.5
  88.5
  87.9
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6

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 $10867.7070828 million for the last fiscal year's total revenue generated by ASML Holding. The default revenue input number comes from 0001 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 51.9% 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 66.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $748 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 5.4% 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 47.8%.

Life of production assets of 17 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 26.5%. 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 - $12816.5666267 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 425.309 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 $75.2 billion.

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COMPANY NEWS

▶ In a Technology War, It Helps to Be the Arms Dealer   [Nov-08-18 04:41AM  Bloomberg]
▶ ASML: 3Q Earnings Snapshot   [06:07AM  Associated Press]
▶ ASML Holding's Q3 Earnings Preview   [Oct-16-18 02:36PM  Benzinga]
▶ Why Earnings Season Could Be Great for ASML   [Oct-15-18 08:37AM  Zacks]
▶ [$$] European Equities Market Talk Roundup   [Oct-12-18 06:18AM  The Wall Street Journal]
▶ Dip in Semiconductor Stocks Temporary: 4 Picks   [Oct-05-18 08:49AM  Zacks]
▶ Why Snap, Fitbit, and ASML Holding Slumped Today   [Sep-12-18 04:53PM  Motley Fool]
▶ [$$] Netflix Brushes Off Subscriber-Count Ding   [Jul-21-18 12:01AM  Barrons.com]
▶ Company News For Jul 19, 2018   [Jul-19-18 09:50AM  Zacks]
▶ ASML: 2Q Earnings Snapshot   [05:02AM  Associated Press]
▶ Chip Equipment Stocks Get Price-Target Cuts On Market Slowdown   [Jul-09-18 04:16PM  Investor's Business Daily]
▶ Two Top Chip-Gear Stocks Hit With Downgrades While One Upgraded   [Jun-13-18 04:39PM  Investor's Business Daily]
▶ Chip Stocks On The Rise: ASML, STMicro, Others   [Jun-05-18 04:49PM  Investor's Business Daily]
▶ Why Chip Stocks Could Get Hit Hard in June   [May-31-18 12:05PM  Barrons.com]
▶ Does ASML Holding NV.s (AMS:ASML) PE Ratio Warrant A Sell?   [Apr-30-18 03:27AM  Simply Wall St.]
▶ ASML Beats First-Quarter Views, But Gross Margin Outlook Disappoints   [Apr-18-18 04:28PM  Investor's Business Daily]
▶ ASML: 1Q Earnings Snapshot   [07:10AM  Associated Press]
▶ Alcoa, ASML, American Express Earnings Headline Investing Action Plan   [Apr-17-18 05:03PM  Investor's Business Daily]
▶ Apple Clouds ASML Earnings Forecast   [Apr-13-18 03:38PM  Barrons.com]
▶ ASML, Lam Research, Taiwan Semiconductor Kick Off Chip Earnings Season   [Apr-12-18 04:29PM  Investor's Business Daily]
▶ Apple Supplier, Lam Research Lead 5 Chip Stocks In Buy Zones   [Mar-12-18 04:11PM  Investor's Business Daily]
▶ Chip-Gear Makers Rise On Taiwan Semi Earnings Read-Through   [Jan-18-18 04:37PM  Investor's Business Daily]
▶ ASML Joins Rank Of Stocks With RS Ratings Over 90   [03:00AM  Investor's Business Daily]
▶ ASML Joins Elite List Of Stocks With 95-Plus Composite Rating   [03:00AM  Investor's Business Daily]
▶ Chip-Gear Stocks Rock On Upbeat ASML, Ichor Reports   [05:40PM  Investor's Business Daily]
▶ The Hot Stock: Lam Research Gains 7.7%   [04:37PM  Barrons.com]
▶ Chip-Gear Maker ASML Breaks Out On Earnings Beat; Group Jumps   [04:04PM  Investor's Business Daily]
▶ Apple Sits Out As Microsoft, IBM Boost Dow; Bitcoin Trims Loss   [01:30PM  Investor's Business Daily]

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