the street analysis- asml

ASML HOLDING NVASMLNASDAQ:

November 1, 2015

BUY HOLD SELL

BUYBUYBUYBUYBUYRATING SINCE 05/18/2010

TARGET PRICE $107.80A+ A A- B+ B B- C+ C C- D+ D D- E+ E E- F

Annual Dividend Rate$0.65

Annual Dividend Yield0.70%

Beta1.45

Market Capitalization$39.9 Billion

52-Week Range$82.07-$114.14

Price as of 10/29/2015$92.06

Sector: Technology Sub-Industry: Semiconductor Equipment Source: S&P

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracyor makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.

PAGE 1Report Date: November 1, 2015

ASML BUSINESS DESCRIPTIONASML Holding N.V. engages in the development,

production, marketing, sale, and servicing of

advanced semiconductor equipment systems with

a focus on lithography related systems worldwide.

STOCK PERFORMANCE (%)

3 Mo. 1 Yr. 3 Yr (Ann)

Price Change -7.03 -4.63 9.26

GROWTH (%)

Last Qtr 12 Mo. 3 Yr CAGR

Revenues 28.59 -14.05 4.51

Net Income 50.60 -14.33 3.22

EPS 49.09 -13.27 -6.83

RETURN ON EQUITY (%)

ASML Ind Avg S&P 500

Q3 2015 16.98 21.24 12.91

Q3 2014 19.48 17.15 14.28

Q3 2013 12.79 13.56 13.75

P/E COMPARISON

26.08

ASML

33.81

Ind Avg

22.01

S&P 500

EPS ANALYSIS¹ ($)

2015

Q3

0.82

Q2

0.98

Q1

1.00

2014

Q4

0.73

Q3

0.55

Q2

1.22

Q1

0.77

2013

Q4

1.53

Q3

0.63

Q2

0.76Q

1 0.

29

NA = not available NM = not meaningful

1 Compustat fiscal year convention is used for all fundamentaldata items.

Weekly Price: (US$) SMA (50) SMA (100) 2 Years1 Year

2013 2014 2015

80

85

90

95

100

105

110

115

TARGET PRICE $107.80TARGET PRICE $107.80TARGET PRICE $107.80TARGET PRICE $107.80TARGET PRICE $107.80

Rating History

BUY

0

10

20Volume in Millions

COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History

RECOMMENDATIONWe rate ASML HOLDING NV (ASML) a BUY. This is driven by some important positives, which we believe

should have a greater impact than any weaknesses, and should give investors a better performance

opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its

revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in

earnings per share, increase in net income and good cash flow from operations. We feel its strengths

outweigh the fact that the company has had lackluster performance in the stock itself.

HIGHLIGHTSThe revenue growth greatly exceeded the industry average of 12.9%. Since the same quarter one year prior,

revenues rose by 28.6%. Growth in the company's revenue appears to have helped boost the earnings per

share.

ASML's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying

that there has been very successful management of debt levels. To add to this, ASML has a quick ratio of

1.56, which demonstrates the ability of the company to cover short-term liquidity needs.

ASML HOLDING NV has improved earnings per share by 49.1% in the most recent quarter compared to the

same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth

over the past year. We feel that this trend should continue. During the past fiscal year, ASML HOLDING NV

increased its bottom line by earning $3.27 versus $3.21 in the prior year. This year, the market expects an

improvement in earnings ($3.47 versus $3.27).

The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500

and the Semiconductors & Semiconductor Equipment industry. The net income increased by 50.6% when

compared to the same quarter one year prior, rising from $239.33 million to $360.45 million.

Net operating cash flow has significantly increased by 105.89% to $469.08 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 -30.92%.


November 1, 2015

Sector: Technology Semiconductor Equipment Source: S&P

Annual Dividend Rate

$0.65Annual Dividend Yield

0.70%Beta

1.45Market Capitalization

$39.9 Billion52-Week Range

$82.07-$114.14Price as of 10/29/2015

$92.06



PEER GROUP ANALYSIS

REVENUE GROWTH AND EBITDA MARGIN*

EBITDA Margin (TTM)

Rev

enue

Gro

wth

(TTM

)

-20%

40%

70%-10%

FAVORABLE

UNFAVORABLE

TERTERTERTERTER

SUNESUNESUNESUNESUNE AMATAMATAMATAMATAMAT

TSRATSRATSRATSRATSRA

ENTGENTGENTGENTGENTG

ATEATEATEATEATE

AMKRAMKRAMKRAMKRAMKR

LRCXLRCXLRCXLRCXLRCX

KLACKLACKLACKLACKLAC

ASMLASMLASMLASMLASML

Companies with higher EBITDA margins and

revenue growth rates are outperforming companies

with lower EBITDA margins and revenue growth

rates. Companies for this scatter plot have a market

capitalization between $1.5 Billion and $39.9 Billion.

Companies with NA or NM values do not appear.

*EBITDA – Earnings Before Interest, Taxes, Depreciation andAmortization.

REVENUE GROWTH AND EARNINGS YIELD

Earnings Yield (TTM)

Rev

enue

Gro

wth

(TTM

)

-20%

40%

20%-50%

FAVORABLE

UNFAVORABLE

TERTERTERTERTER

SUNESUNESUNESUNESUNE AMATAMATAMATAMATAMATMKSIMKSIMKSIMKSIMKSI

TSRATSRATSRATSRATSRA

ENTGENTGENTGENTGENTG

ATEATEATEATEATE

AMKRAMKRAMKRAMKRAMKR

LRCXLRCXLRCXLRCXLRCX

KLACKLACKLACKLACKLAC

ASMLASMLASMLASMLASML

Companies that exhibit both a high earnings yield

and high revenue growth are generally more

attractive than companies with low revenue growth

and low earnings yield. Companies for this scatter

plot have revenue growth rates between -14.1% and

35.7%. Companies with NA or NM values do not

appear.

INDUSTRY ANALYSISThe US semiconductors and semiconductor equipment industry is known for its technological advancements.

The semiconductor market includes companies that manufacture and sell integrated circuits and discrete

semiconductor devices. The semiconductor equipment market includes companies that manufacture and sell

equipment for the production of semiconductor devices. About 5,000 companies operate in this industry,

which has approximate annual revenue of $150 billion. The top 50 companies hold more than 70% of total

market share. Major players are Intel (INTC), Texas Instruments (TXN), Micron Technology (MU), and

Advanced Micro Devices (AMD).

The industry is cyclical and subject to supply/demand fluctuations and price erosion. After experiencing a

downturn during the recent recessionary period, the semiconductor market is building back on renewed

demand.

Demand for semiconductor products is indirect and driven by sales of personal computers, cell phones,

consumer electronics devices, and other electronic equipment. The industry is capital-intensive and requires

significant investments to advance technology and reduce manufacturing costs. Research and development

expenses form a major part of capital expenditure and the industry spends over $15 billion annually.

The industry is subject to various environmental regulations related to pollutant emissions, waste-water

discharges, and the use of hazardous substances. The European Union’s directives, such as the Restriction

of Use of Certain Hazardous Substances and the Registration, Evaluation, Authorization, and Restriction of

Chemicals are relevant to the manufacturing process. China, which represents the world’s second largest

semiconductor market and is a major importer of US products, also restricts the use of hazardous substances

in electronic products.

Although the industry is the second-largest exporting industry in the US, its global market share in chip

production has eroded due to insufficient research funding, workforce challenges, and foreign incentives.

The demand pattern has shifted production to low cost substitutes and shifted the demand centers to China,

Taiwan, and the rest of Asia. There has also been a lateral shift of capital as research and development

investments move away from the US to Asia.

PEER GROUP: Semiconductors & Semiconductor Equipment

Recent Market Price/ Net Sales Net Income

Ticker Price ($)Company Name Cap ($M) Earnings TTM ($M) TTM ($M)

ASML 92.06ASML HOLDING NV 39,893 26.08 6,995.11 1,543.91

TER 19.38TERADYNE INC 4,086 39.55 1,644.37 103.31

SUNE 8.33SUNEDISON INC 2,962 NM 2,069.70 -1,160.60

AMAT 16.74APPLIED MATERIALS INC 20,098 15.94 9,555.00 1,297.00

MKSI 35.15MKS INSTRUMENTS INC 1,876 14.35 844.16 130.97

TSRA 34.85TESSERA TECHNOLOGIES INC 1,816 9.27 297.30 207.49

ENTG 12.73ENTEGRIS INC 1,789 24.48 1,085.97 72.04

ATE 7.93ADVANTEST CORP 1,583 14.96 1,364.99 103.11

AMKR 6.19AMKOR TECHNOLOGY INC 1,469 18.21 3,067.07 79.67

LRCX 75.84LAM RESEARCH CORP 12,021 16.63 5,706.99 803.18

KLAC 66.32KLA-TENCOR CORP 10,342 26.74 2,813.79 398.82

The peer group comparison is based on Major Semiconductor Equipment companies of comparable size.


November 1, 2015




0.70%Beta



$82.07-$114.14Price as of 10/29/2015

$92.06



COMPANY DESCRIPTIONASML Holding N.V. engages in the development,

production, marketing, sale, and servicing of advanced

semiconductor equipment systems with a focus on

lithography related systems worldwide. It provides PAS

5500 family products, which comprise wafer steppers,

and step and scan systems with i-line, krypton fluoride,

and argon fluoride light sources for processing wafers.

The company also offers TWINSCAN systems, including

immersion lithography systems for manufacturing

environments for which imaging at a resolution down to

38 nanometers are required; TWINSCAN NXT systems,

which enables improved imaging and overlay; and NXE

system, an optical technology that utilizes reflective

mirrors. ASML Holding N.V. markets and sells its

products through its direct sales force. The company was

formerly known as ASM Lithography Holding N.V. and

changed its name to ASML Holding N.V. in 2001. ASML

Holding N.V. was founded in 1984 and is headquartered

in Veldhoven, the Netherlands.

ASML HOLDING NV

De Run 6501

Veldhoven 5504DR

NLD

Phone: 31 40 268 3000

http://www.asml.com

Employees: 14000

STOCK-AT-A-GLANCEBelow is a summary of the major fundamental and technical factors we consider when determining our

overall recommendation of ASML shares. It is provided in order to give you a deeper understanding of our

rating methodology as well as to paint a more complete picture of a stock's strengths and weaknesses. It is

important to note, however, that these factors only tell part of the story. To gain an even more comprehensive

understanding of our stance on the stock, these factors must be assessed in combination with the stock’s

valuation. Please refer to our Valuation section on page 5 for further information.

FACTOR SCORE

Growth out of 5 stars2.5Measures the growth of both the company's income statement and

cash flow. On this factor, ASML has a growth score better than 40% of

the stocks we rate.

weak strong

Total Return out of 5 stars2.5Measures the historical price movement of the stock. The stock

performance of this company has beaten 40% of the companies we

cover.

weak strong

Efficiency out of 5 stars5.0Measures the strength and historic growth of a company's return on

invested capital. The company has generated more income per dollar of

capital than 90% of the companies we review.

weak strong

Price volatility out of 5 stars3.0Measures the volatility of the company's stock price historically. The

stock is less volatile than 50% of the stocks we monitor.

weak strong

Solvency out of 5 stars4.5Measures the solvency of the company based on several ratios. The

company is more solvent than 80% of the companies we analyze.

weak strong

Income out of 5 stars3.0Measures dividend yield and payouts to shareholders. The company's

dividend is higher than 50% of the companies we track.

weak strong

THESTREET RATINGS RESEARCH METHODOLOGY

TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both

price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to

perform against a general benchmark of the equities market and interest rates. While our model is

quantitative, it utilizes both subjective and objective elements. For instance, subjective elements include

expected equities market returns, future interest rates, implied industry outlook and forecasted company

earnings. Objective elements include volatility of past operating revenues, financial strength, and company

cash flows.

Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown

as compared to potential profit volatility, i.e.how much one is willing to risk in order to earn profits; the level of

acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings

growth; and the financial strength of the underlying company as compared to its stock's valuation as

compared to projected earnings growth; and the financial strength of the underlying company as compared

to its stock's performance. These and many more derived observations are then combined, ranked, weighted,

and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of

selecting stocks.


November 1, 2015




0.70%Beta



$82.07-$114.14Price as of 10/29/2015

$92.06



Consensus EPS Estimates² ($)IBES consensus estimates are provided by Thomson Financial

0.69

Q4 FY15

3.47 E

2015(E)

4.01 E

2016(E)

INCOME STATEMENT

Q3 FY15 Q3 FY14

Net Sales ($mil) 1,731.91 1,346.82

EBITDA ($mil) 479.73 297.66

EBIT ($mil) 393.11 235.37

Net Income ($mil) 360.45 239.33

BALANCE SHEET

Q3 FY15 Q3 FY14

Cash & Equiv. ($mil) 2,992.42 3,390.11

Total Assets ($mil) 14,181.99 15,275.59

Total Debt ($mil) 1,256.06 1,436.31

Equity ($mil) 9,091.34 9,248.87

PROFITABILITY

Q3 FY15 Q3 FY14

Gross Profit Margin 50.41% 48.09%

EBITDA Margin 27.69% 22.10%

Operating Margin 22.70% 17.48%

Sales Turnover 0.49 0.53

Return on Assets 10.88% 11.79%

Return on Equity 16.98% 19.48%

DEBT

Q3 FY15 Q3 FY14

Current Ratio 2.71 2.45

Debt/Capital 0.12 0.13

Interest Expense NA NA

Interest Coverage NA NA

SHARE DATA

Q3 FY15 Q3 FY14

Shares outstanding (mil) 433 441

Div / share 0.00 0.00

EPS 0.82 0.55

Book value / share 21.00 20.98

Institutional Own % NA NA

Avg Daily Volume 1,298,372 994,459

2 Sum of quarterly figures may not match annual estimates due touse of median consensus estimates.

FINANCIAL ANALYSISASML HOLDING NV's gross profit margin for the third quarter of its fiscal year 2015 is essentially unchanged

when compared to the same period a year ago. The company has grown sales and net income significantly,

outpacing the average growth rates of competitors within its industry. ASML HOLDING NV has strong

liquidity. Currently, the Quick Ratio is 1.56 which shows the ability to cover short-term cash needs. The

company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing

by 1.70% from the same quarter last year. The key liquidity measurements indicate that the company is

unlikely to face financial difficulties in the near future.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the

next 12-months. To learn more visit www.TheStreetRatings.com.


November 1, 2015




0.70%Beta



$82.07-$114.14Price as of 10/29/2015

$92.06



RATINGS HISTORYOur rating for ASML HOLDING NV has not changed

since 5/18/2010. As of 10/29/2015, the stock was

trading at a price of $92.06 which is 19.4% below its

52-week high of $114.14 and 12.2% above its

52-week low of $82.07.

2 Year Chart

2014

$90

$100

$110

$120

BU

Y: $

94.2

0

MOST RECENT RATINGS CHANGES

Date Price Action From To

10/29/13 $94.20 No Change Buy Buy

Price reflects the closing price as of the date listed, if available

RATINGS DEFINITIONS &DISTRIBUTION OF THESTREET RATINGS

(as of 10/29/2015)

39.13% Buy - We believe that this stock has the

opportunity to appreciate and produce a total return of

more than 10% over the next 12 months.

33.26% Hold - We do not believe this stock offers

conclusive evidence to warrant the purchase or sale of

shares at this time and that its likelihood of positive total

return is roughly in balance with the risk of loss.

27.61% Sell - We believe that this stock is likely to

decline by more than 10% over the next 12 months, with

the risk involved too great to compensate for any

possible returns.

TheStreet Ratings14 Wall Street, 15th FloorNew York, NY 10005www.thestreet.comResearch Contact: 212-321-5381

Sales Contact: 866-321-8726

VALUATIONBUY. The current P/E ratio indicates a discount compared to an average of 33.81 for the Semiconductors &

Semiconductor Equipment industry and a premium compared to the S&P 500 average of 22.01. For additional

comparison, its price-to-book ratio of 4.38 indicates a significant premium versus the S&P 500 average of 2.78

and a discount versus the industry average of 4.88. The price-to-sales ratio is well above both the S&P 500

average and the industry average, indicating a premium. Upon assessment of these and other key valuation

criteria, ASML HOLDING NV proves to trade at a discount to investment alternatives within the industry.

1 2 3 4 5Price/Earningspremium discount

ASML 26.08 Peers 33.81

• Discount. A lower P/E ratio than its peers can

signify a less expensive stock or lower growth

expectations.

• ASML is trading at a discount to its peers.

1 2 3 4 5Price/CashFlowpremium discount


• Premium. The P/CF ratio, a stock’s price divided by

the company's cash flow from operations, is useful

for comparing companies with different capital

requirements or financing structures.

• ASML is trading at a significant premium to its

peers.

1 2 3 4 5Price/Projected Earningspremium discount


• Premium. A higher price-to-projected earnings ratio

than its peers can signify a more expensive stock

or higher future growth expectations.


peers.

1 2 3 4 5Price to Earnings/Growthpremium discount


• Premium. The PEG ratio is the stock’s P/E divided by

the consensus estimate of long-term earnings

growth. Faster growth can justify higher price

multiples.

• ASML trades at a significant premium to its peers.

1 2 3 4 5Price/Bookpremium discount


• Discount. A lower price-to-book ratio makes a

stock more attractive to investors seeking stocks

with lower market values per dollar of equity on the

balance sheet.

• ASML is trading at a discount to its peers.

1 2 3 4 5Earnings Growthlower higher

ASML -13.27 Peers 48.61

• Lower. Elevated earnings growth rates can lead to

capital appreciation and justify higher

price-to-earnings ratios.

• However, ASML is expected to significantly trail its

peers on the basis of its earnings growth rate.

1 2 3 4 5Price/Salespremium discount


• Premium. In the absence of P/E and P/B multiples,

the price-to-sales ratio can display the value

investors are placing on each dollar of sales.


industry.

1 2 3 4 5Sales Growthlower higher

ASML -14.05 Peers 10.81

• Lower. A sales growth rate that trails the industry

implies that a company is losing market share.

• ASML significantly trails its peers on the basis of

sales growth

DISCLAIMER:

The opinions and information contained herein have been obtained or derived from sources believed to be reliable, but

TheStreet Ratings cannot guarantee its accuracy and completeness, and that of the opinions based thereon. Data is provided

via the COMPUSTAT® Xpressfeed product from Standard &Poor's, a division of The McGraw-Hill Companies, Inc., as well as

other third-party data providers.

TheStreet Ratings is a division of TheStreet, Inc., which is a publisher. This research report contains opinions and is provided

for informational purposes only. You should not rely solely upon the research herein for purposes of transacting securities or

other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a

qualified securities professional, before you make any investment. None of the information contained in this report constitutes,

or is intended to constitute a recommendation by TheStreet Ratings of any particular security or trading strategy or a

determination by TheStreet Ratings that any security or trading strategy is suitable for any specific person. To the extent any of

the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the

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