Is Now a Golden Opportunity to Buy ASML Stock, With Revenue Set to Jump?

Core Viewpoint - The introduction of ASML's new High NA EUV system is expected to significantly enhance the company's financial performance in the near future, making it a potentially attractive investment opportunity [1][8]. Group 1: Financial Performance - ASML's Q1 revenue declined nearly 22% year over year to 5.3 billion euros ($5.74 billion), with a sequential drop of 27% [2]. - Equipment sales fell nearly 26% year over year to 3.97 billion euros ($4.3 billion), while service revenue decreased nearly 6% year over year to 1.32 billion euros ($1.43 billion) [2]. - The company sold 66 new lithography systems in Q1, down from 96 a year ago, and 4 used systems, unchanged from the previous year [2]. Group 2: New Technology and Customer Adoption - ASML began shipping its High NA EUV systems, with Intel being the first customer to install one in April, which is expected to enhance precision and scalability in chip manufacturing [3]. - Taiwan Semiconductor Manufacturing (TSMC) and Samsung are also set to receive shipments of the new systems by the end of the year, with TSMC expected to place significant orders related to 2nm technology starting in mid-2024 [4]. Group 3: Future Projections - ASML forecasts revenue to rise to between 30 billion to 40 billion euros ($32.4 billion to $43.2 billion) by 2025, up from 27.6 billion euros ($29.8 billion) last year [5]. - Analysts project a significant increase in earnings per share (EPS) from an estimated $20.76 this year to $32.23 in 2025, and EBITDA to rise to over $16 billion from $10.3 billion in 2024 [7]. Group 4: Valuation Metrics - ASML's stock trades at a forward price-to-earnings (P/E) multiple of about 50 times and an enterprise value (EV)-to-EBITDA multiple of 40 times [6]. - With projected increases in EPS and EBITDA, the P/E multiple could decrease to around 32 times and the EV/EBITDA multiple to about 25 times based on 2025 projections [7]. Group 5: Competitive Advantage - ASML is currently the only company producing chip manufacturing machines with High NA EUV technology, providing it with a significant technological edge over competitors [8]. - The growing demand for AI and related chips further supports ASML's market position and growth potential [8].