DCF Studio

    ASML.AS · AMS · Technology

    ASML Holding N.V.

    Also onConsensus Drift

    Implied value per share

    EUR 428.03

    Market price

    EUR 1446.00

    Implied upside

    -70.4%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    AdjustedCapital expenditure runs at 6.6% of revenue against depreciation of 3.0%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.
    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    Current EV/EBITDA of 44.3x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    EUR 428.03-70.4%
    Exit multiple
    EUR 882.75-39.0%
    Market price
    EUR 1446.00

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn9bn18bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 37.7bnEUR 43.6bnEUR 50.4bnEUR 58.2bnEUR 67.3bn+15.6%
    EBITEUR 12.3bnEUR 14.2bnEUR 16.4bnEUR 18.9bnEUR 21.9bn+15.6%
    NOPATEUR 10.2bnEUR 11.8bnEUR 13.6bnEUR 15.8bnEUR 18.2bn+15.6%
    Add depreciation & amortisationEUR 1.1bnEUR 1.3bnEUR 1.5bnEUR 1.7bnEUR 2.0bn+15.6%
    Less capital expenditureEUR -2.5bnEUR -2.9bnEUR -3.3bnEUR -3.9bnEUR -4.5bn+15.6%
    Less increase in working capitalEUR 1.2bnEUR 1.4bnEUR 1.6bnEUR 1.8bnEUR 2.1bn-15.6%
    Free cashflow to firmEUR 10.0bnEUR 11.6bnEUR 13.4bnEUR 15.4bnEUR 17.8bn+15.6%
    Discount factor0.94400.84130.74970.66810.5954-
    Present valueEUR 9.5bnEUR 9.7bnEUR 10.0bnEUR 10.3bnEUR 10.6bn+3.0%
    Present Value Of The ForecastEUR 50.2bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.20%USD assumption - no free live source available for this market (assumption)
    Equity risk premium6.50%Market assumption
    Beta1.243Reported 1.363, pulled toward 1.0 (Blume)
    Cost of equity12.28%Risk-free + beta x equity risk premium
    Cost of debt4.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationEUR 555.4bn99.2% of capital
    Total debtEUR 4.4bn0.8% of capital, book value as a proxy
    Tax rate16.7%Effective, capped at statutory
    WACC12.21%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareEUR 428.03

    68% of EV

    Forecast FCFF, final year
    EUR 17.8bn
    Capex at depreciation, working capital in reinvestment
    EUR 18.2bn
    Less reinvestment at g/ROIC (6.2% of NOPAT)
    EUR -1.1bn
    Capitalised
    EUR 17.1bn
    ROIC (reported)
    40.3%
    Terminal value, undiscounted
    EUR 180.3bn
    Terminal value, discounted
    EUR 107.4bn
    Enterprise value
    EUR 157.5bn
    Less net debt
    EUR -8.9bn
    Equity value
    EUR 166.5bn

    Exit at 20.0x EBITDA

    Value per shareEUR 882.75

    85% of EV

    Terminal value, undiscounted
    EUR 477.3bn
    Terminal value, discounted
    EUR 284.2bn
    Enterprise value
    EUR 334.4bn
    Less net debt
    EUR -8.9bn
    Equity value
    EUR 343.3bn

    Spread between methods: 69%.

    Sensitivity

    Value per share (EUR) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    10.21%497.26515.03535.05557.80583.88
    11.21%447.10460.49475.37492.02510.78
    12.21%406.37416.68428.03440.56454.50
    13.21%372.65380.75389.57399.23409.84
    14.21%344.29350.74357.72365.29373.54

    Outlined: this model. Green text: above today's price of 1446.00. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year15.6%51.0%+35.5pp
    Discount rate12.2%5.3%-6.9pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.