Latest Developments:
ASML reported strong revenue growth in 3Q24, reaching €7.47 billion, an 11.9% YoY increase. However, net bookings fell by 52%, and growth is projected to slow, with 2024 revenue expected to increase by only 2.33%. The company faces continued challenges due to export controls, particularly affecting sales in China, which accounted for nearly half of its revenue.

Investment Case:
Despite the recent 16% drop in ASML's share price, the company's current valuation still appears lofty. The market has priced in high growth, with expectations for a 16% annual growth rate between 2025 and 2030. However, given the slowdown in growth and ongoing geopolitical risks, including potential tightening of export restrictions, investors should be cautious.

Company's Valuation:
A DCF analysis, based on management's guidance and assumptions of steady margins and revenue growth, suggests an implied share price of €572.52. With ASML trading at €664.50, there is a potential downside of 13.84%. The current valuation leaves little room for error, and any further challenges could lead to significant downside.

Disclaimer: The above is an excerpt on a report written by our close associate, Selendis Research. Check out the full report here on Seeking Alpha. All information provided is intended solely for general informational purposes. Seven Insights does not take into account individual financial goals or situations and does not provide personalized investment advice. Seven Insights is not a licensed securities dealer, broker, U.S. investment adviser, or investment bank.