ASML (ASML) Gains As Market Dips: What You Should Know

ASML (ASML) closed at $366.74 in the latest trading session, marking a +1.2% move from the prior day. This change outpaced the S&P 500's 0.84% loss on the day. Meanwhile, the Dow lost 0.47%, and the Nasdaq, a tech-heavy index, lost 1.27%.

Prior to today's trading, shares of the equipment supplier to semiconductor makers had lost 3.35% over the past month. This has lagged the Computer and Technology sector's gain of 0.69% and the S&P 500's gain of 0.6% in that time.

ASML will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.58, up 55.42% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.25 billion, up 28.13% from the prior-year quarter.

ASML's full-year Zacks Consensus Estimates are calling for earnings of $8.61 per share and revenue of $15.32 billion. These results would represent year-over-year changes of +24.96% and +15.43%, respectively.

It is also important to note the recent changes to analyst estimates for ASML. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ASML is currently a Zacks Rank #3 (Hold).

Looking at its valuation, ASML is holding a Forward P/E ratio of 42.07. This represents a premium compared to its industry's average Forward P/E of 14.89.

Meanwhile, ASML's PEG ratio is currently 1.85. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Semiconductor Equipment - Wafer Fabrication stocks are, on average, holding a PEG ratio of 1.12 based on yesterday's closing prices.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 6, putting it in the top 3% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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