Here's Why ASML (ASML) Fell More Than Broader Market

ASML (ASML) ended the recent trading session at $732.25, demonstrating a -1.87% swing from the preceding day's closing price. The stock trailed the S&P 500, which registered a daily loss of 0.29%. Elsewhere, the Dow lost 0.32%, while the tech-heavy Nasdaq lost 0.5%.

The equipment supplier to semiconductor makers's shares have seen an increase of 4.24% over the last month, surpassing the Computer and Technology sector's gain of 1.8% and the S&P 500's gain of 2.52%.

Market participants will be closely following the financial results of ASML in its upcoming release. The company plans to announce its earnings on January 29, 2025. In that report, analysts expect ASML to post earnings of $7.17 per share. This would mark year-over-year growth of 28.04%. Meanwhile, the latest consensus estimate predicts the revenue to be $9.76 billion, indicating a 25.3% increase compared to the same quarter of the previous year.

Investors should also note any recent changes to analyst estimates for ASML. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.17% lower within the past month. Currently, ASML is carrying a Zacks Rank of #4 (Sell).

Digging into valuation, ASML currently has a Forward P/E ratio of 29.66. For comparison, its industry has an average Forward P/E of 28.01, which means ASML is trading at a premium to the group.

One should further note that ASML currently holds a PEG ratio of 2.33. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. By the end of yesterday's trading, the Semiconductor Equipment - Wafer Fabrication industry had an average PEG ratio of 2.75.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 220, putting it in the bottom 13% of all 250+ industries.