Here's Why ASML (ASML) Fell More Than Broader Market

Core Viewpoint - ASML is set to report its financial results on January 29, 2025, with expectations of significant year-over-year growth in earnings and revenue [2]. Group 1: Stock Performance - ASML's stock closed at $732.25, reflecting a decrease of 1.87% from the previous day, underperforming compared to the S&P 500, Dow, and Nasdaq [1]. - Over the last month, ASML's shares have increased by 4.24%, outperforming the Computer and Technology sector's gain of 1.8% and the S&P 500's gain of 2.52% [1]. Group 2: Earnings Estimates - Analysts expect ASML to report earnings of $7.17 per share, representing a year-over-year growth of 28.04% [2]. - The consensus revenue estimate for ASML is $9.76 billion, indicating a 25.3% increase compared to the same quarter of the previous year [2]. Group 3: Analyst Revisions and Rankings - Recent changes to analyst estimates for ASML reflect evolving short-term business trends, with positive revisions indicating optimism about the company's profitability [3]. - The Zacks Rank system currently rates ASML at 4 (Sell), with the Zacks Consensus EPS estimate having decreased by 0.17% in the past month [5]. Group 4: Valuation Metrics - ASML has a Forward P/E ratio of 29.66, which is higher than the industry average of 28.01, indicating that ASML is trading at a premium [6]. - The company has a PEG ratio of 2.33, compared to the industry average PEG ratio of 2.75, which also considers projected earnings growth [6]. Group 5: Industry Context - The Semiconductor Equipment - Wafer Fabrication industry, to which ASML belongs, is ranked 220 in the Zacks Industry Rank, placing it in the bottom 13% of over 250 industries [7]. - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7].