Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B+ . The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- Compared to its closing price of one year ago, ASML's share price has jumped by 32.64%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ASML should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- ASML's debt-to-equity ratio is very low at 0.11 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.91, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has significantly increased by 125.38% to $637.87 million when compared to the same quarter last year. In addition, ASML HOLDING NV has also vastly surpassed the industry average cash flow growth rate of -78.88%.
- 46.20% is the gross profit margin for ASML HOLDING NV which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 22.40% trails the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.7%. Since the same quarter one year prior, revenues slightly dropped by 0.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
ASML Holding N.V., through its subsidiaries, engages in designing, manufacturing, marketing, and servicing semiconductor processing equipment used in the fabrication of integrated circuits. ASML has a market cap of $21.99 billion and is part of the technology sector and electronics industry. The company has a P/E ratio of 72.8, above the S&P 500 P/E ratio of 17.7. Shares are up 30% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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