Investors Heavily Search ASML Holding N.V. (ASML): Here is What You Need to Know

ASML (ASML) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.Shares of this equipment supplier to semiconductor makers have returned -6.8% over the past month versus the Zacks S&P 500 composite's -5.1% change. The Zacks Semiconductor Equipment - Wafer Fabrication industry, to which ASML belongs, has lost 8.2% over this period. Now the key question is: Where could the stock be headed in the near term?Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.For the current quarter, ASML is expected to post earnings of $5.83 per share, indicating a change of +35% from the year-ago quarter. The Zacks Consensus Estimate has changed +5.1% over the last 30 days.The consensus earnings estimate of $27.23 for the current fiscal year indicates a year-over-year change of +30.8%. This estimate has changed +7.3% over the last 30 days.For the next fiscal year, the consensus earnings estimate of $30.72 indicates a change of +12.8% from what ASML is expected to report a year ago. Over the past month, the estimate has changed +4%.With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for ASML.The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:12 Month EPSRevenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.In the case of ASML, the consensus sales estimate of $8.46 billion for the current quarter points to a year-over-year change of +25.9%. The $37.13 billion and $39.86 billion estimates for the current and next fiscal years indicate changes of +21.5% and +7.3%, respectively.Last Reported Results and Surprise HistoryASML reported revenues of $8.14 billion in the last reported quarter, representing a year-over-year change of +41.8%. EPS of $6.31 for the same period compares with $3.38 a year ago.Compared to the Zacks Consensus Estimate of $8.08 billion, the reported revenues represent a surprise of +0.81%. The EPS surprise was +3.1%.The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.ASML is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about ASML. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ASML Holding N.V. (ASML): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks