Multiple semiconductor stocks, including Micron (MU), Applied Materials (AMAT), and KLA Corporation (KLAC), experienced significant drops due to an accidental leak from ASML Holdings (ASML, Financial). ASML's shares declined by 16.26%, with a current price of $730.43, driven by market concerns over its third-quarter results and outlook.
The financials revealed that ASML posted revenue growth of 11.2% and an increase in earnings per share of 9.1%, exceeding previous guidance. However, net bookings came in at only 2.6 billion euros (~$2.8 billion), significantly below the anticipated 5.39 billion euros (~$5.87 billion).
ASML projects 2025 revenue between 30 billion and 35 billion euros (~$33 billion to $38 billion), which is lower than analysts' forecasts of 36.3 billion euros (~$39.5 billion). The outlook has been affected by a slower-than-expected recovery in non-AI market segments and issues such as Intel's decreased demand and Samsung's operational hiccups.
Given these developments, Micron (MU) remains resilient, benefitting from competitors' reductions in memory capacity investments. This market condition might initially suppress demand but could support improved memory pricing due to decreased supply in the long term.
Regarding ASML's valuation, the company is considered "Modestly Undervalued" based on its GF Value, which stands at $847.64. Despite short-term challenges, ASML shows strong financial health with a strong Altman Z-score of 8.68 and an expanding operating margin. For more information on ASML's valuation, you can refer to its GF Value page.
ASML boasts a robust profitability grade of 'A', highlighting its efficiency in operations, as reflected by a strong return on equity of 52.23%. The stock's financial health is bolstered by a moderate debt-to-equity ratio of 0.31, indicating prudent financial management. Overall, ASML remains a leader in the semiconductor equipment space, with a solid long-term growth outlook.
