ASML: Why I'm Reissuing My Sell Rating (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• ASML's book-to-bill metrics indicate slower demand. And tariffs pose additional challenges to revenues and gross margins via higher input costs.
• Slower product upgrade cycles due to oversupply conditions with Chinese semi-players are likely to pressure gross margins further in H2 FY25.
• ASML stock valuation multiples are a little higher than the longer-term median levels.
• ASML technicals look weak relative to the S&P500, as the buyers' attempt up has lacked strength and momentum.
• I expect China to release more news about its EUV developments. Whilst this is a longer-term risk to ASML's virtual monopoly position in EUVs, de-rating of ASML stock would be premature as China is still years behind ASML.

Read the full article here.