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ASML Holding N.V. (ASML) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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ASML Holding N.V. (ASML)

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Intrinsic Value (DCF)

Current$1,331.60
→
Intrinsic$944.25
-29%
$638.03$944.25$1,552.63
Market implies 35% growth for 5 years
ASML trades at a premium to our conservative estimate — investors expect above-average performance.
At $1332, the market prices in continued strong cash flow growth (35%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $638 → Bull $1553. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →21%23%25%27%
8%$1193$1288$1389$1496
10%$815$877$944$1015
12%$615$661$710$762
14%$493$528$566$606

Bull Case

  • Bull case ($1553) offers 17% upside at 30% growth, 8% discount

Bear Case

  • Bear case ($638) implies 52% downside at 20% growth, 12% discount
  • Price reflects 35% growth expectations vs 25% historical — high bar to clear
  • Trading 29% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection

Year 1$11.88B
Year 2$14.85B
Year 3$18.56B
Year 4$23.20B
Year 5$29.01B
Terminal$459.63B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$9.50BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is ASML stock undervalued or overvalued?
🔴 OVERVALUED

ASML trades at $1331.60 vs. our DCF-derived intrinsic value of $648.78, implying -48% downside. Using a 9.5% WACC and 25.0% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($952.93) suggests limited upside.

What is ASML's intrinsic value?

Using a 5-year DCF model: Base FCF of $9.50B, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-7.74B net debt and dividing by 0.39B shares: Bear $441.28 | Base $648.78 | Bull $952.93. Current price $1331.60 implies -48% to base case.

How is ASML's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($247.62B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 26.1x.