asml: a second chance for investors?
veldhoven, Wednesday, 27 August 2025.
despite asml’s critical role in the semiconductor industry and strong demand from major players like intel, tsmc and nvidia, its stock is trading at valuations similar to the march 2020 crash. the company’s euv lithography systems drive secular demand. this disconnect between asml’s growth prospects and current valuation could represent a compelling opportunity for long-term investors. the forward p/e ratios are at multi-year lows, reminiscent of the covid-19 crash.
profitability and growth metrics
ASML’s financial performance showcases its robust growth and profitability. The company’s profit for 2025 reached €9.53 billion, a 25.892 25.92% increase compared to the €7.57 billion reported in 2024 [3]. ASML has demonstrated strong historical growth, achieving an average annual earnings per share (EPS) growth of 25.62% and revenue growth of 19.05% [8]. The company’s returns on invested capital stand at 30.33%, complemented by operating margins of 34.90%, highlighting its efficiency and financial health [8].
analyst perspectives and market sentiment
Despite ASML’s strong Q2 2025 results, the market has reacted with some concern, leading to a nearly 5% stock drop over the past week and an 11% decrease in the last month [7]. Trade tensions and worries about China-related order cancellations, despite €1.4 billion in cancellations, have contributed to this negative sentiment [7]. However, some analysts view ASML’s share price weakness as a potential buying opportunity [7]. The stock’s underperformance relative to the S&P 500 has also been noted [1].
future growth projections
While ASML delivered strong Q2 2025 results, management has cautioned about potential ‘no growth’ in 2026 due to prevailing uncertainties [7]. Despite this, projections for the coming years remain positive. Expected profits are €10.11 billion in 2026, €12.27 billion in 2027, €13.76 billion in 2028, €16.62 billion in 2029 and €19.18 billion in 2030 [3]. Analysts project an annual EPS expansion of 17.02% and revenue growth of 10.64% [8].
valuation and garp assessment
ASML has been identified as a top GARP (Growth at a Reasonable Price) stock, indicating a balance between growth, profitability, and valuation [8]. The company’s price-to-earnings ratio of 26.85 is better than 70% of its peers, and the forward P/E ratio is 25.10 [8]. ASML’s PEG ratio suggests that its current valuation is justified [8]. The company has a ChartMill Valuation Rating of 5, Growth Rating of 8, and Profitability Rating of 9 [8].