ASML Holding (ASML) Looks Fully Valued After A 12% Pullback

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ASML Holding (NasdaqGS:ASML) has drawn investor attention after recent share price pressure, with the stock down about 12% over the past month and 12% over the past 3 months. That short term weakness contrasts with its longer term returns.

See our latest analysis for ASML Holding.

The recent 1 day share price decline of 4.37% and 7 day fall of 12.13% add to the 30 day drop of 11.79%, yet ASML Holding still shows stronger momentum over longer horizons, with a 36.02% year to date share price return and a 1 year total shareholder return of 121.55%.

If you are reassessing ASML Holding after this pullback and want to see what else the market is pricing into semiconductor related plays, it is worth scanning 56 AI infrastructure stocks

After a sharp pullback in ASML Holding following a strong 1 year run, investors face a choice: treat this as an early entry point or wait for a deeper reset. The valuation numbers help frame that trade off next.

Preferred P/E of 50.1x: Is it justified?

ASML Holding closed at $1,582.95 and is trading on a P/E of 50.1x, which sits slightly below both peer and industry averages while still reflecting a premium price tag in absolute terms.

The P/E multiple compares the current share price to earnings per share. For a company like ASML Holding, which operates in semiconductor equipment and services, investors often focus on P/E because earnings quality and profitability are central to the story.

ASML Holding has earnings growth of 14.4% per year over the past 5 years, current net profit margins of 30.1% compared with 29.3% last year, and earnings that are forecast to grow 21.2% per year with a forecast Return on Equity of 59%. In that context, a 50.1x P/E that is below the US Semiconductor industry average of 53.6x, below the peer average of 51.7x, and below the estimated fair P/E of 54.7x indicates that the market is assigning a rich valuation that still sits under the level the fair ratio suggests it could move toward.

Compared with the broader US market, where ASML Holding has outperformed over 1 year and where its forecast revenue growth of 16.4% per year is above the expected 12.5% market growth, the current P/E looks more like a high quality premium that is modestly discounted relative to sector benchmarks rather than an extreme outlier.

Explore the SWS fair ratio for ASML Holding

Result: Price-to-earnings of 50.1x (ABOUT RIGHT)

Story Continues

However, the current ASML Holding valuation could come under pressure if semiconductor equipment demand softens or if China related revenue is affected by tighter export controls.

Find out about the key risks to this ASML Holding narrative.

Another view on ASML Holding using our DCF model

The P/E work suggests ASML Holding is priced slightly below its fair ratio, yet our DCF model points the other way. On that view, the stock at $1,582.95 sits above an estimated future cash flow value of $975.22, which implies less room for error if growth or margins disappoint.

For readers who want to see how this picture was built from the ground up, it is worth walking through our cash flow assumptions and discount rates next. Look into how the SWS DCF model arrives at its fair value.ASML Discounted Cash Flow as at Jul 2026

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out ASML Holding for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 49 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

After considering both the pullback and the elevated P/E, sentiment on ASML Holding appears mixed. If you want to move quickly from headlines to data and form your own view, it is worth checking the 4 key rewards

Looking for more investment ideas beyond ASML Holding?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include ASML.

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