7.9% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 51.4%
•LTM Operating Margins: 30.7%
•LTM Net Income Margins: 26.5%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~14% MORE in EPS

Using Benjamin Graham’s 2G rule of thumb, $ASML has to grow earnings at a 13.65% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be more than the (13.65%) required growth rate:

2024E: $20.87 (-5.3% YoY) *FY Dec
2025E: $33.07 (58.5% YoY)
2026E: $38.61 (16.7% YoY)

$ASML has a decent track record of meeting analyst estimates ~2 years out, but let’s assume $ASML ends 2026 with $38.61 in EPS & see its CAGR potential assuming different multiples

30x P/E: $1158.30💵 … ~21.0% CAGR

29x P/E: $1119.69💵 … ~19.3% CAGR

28x P/E: $1081.08💵 … ~17.6% CAGR

27x P/E: $1042.47💵 … ~15.8% CAGR

26x P/E: $1003.86💵 … ~14.0% CAGR

25x P/E: $965.25💵 … ~12.1% CAGR

As you can see, $ASML appears to have attractive return potential even if we assume greater or equal to 25x earnings (well below its 10-year mean & justified given its quality & growth rate)

However we should be aware that, while $ASML is a wide-moat business, we’ll be relying on fairly aggressive growth estimates in 2025 & these kinds of estimates should always be taken with caution

Today at $753💵 $ASML appears to be a great consideration for investment, although it will come with extreme volatility

Also, we have some margin of safety by relying on 25x (rather than 30x)

Given its volatility, however, it’s wise to piece into $ASML — this way, you enhance your margin of safety while also positioning yourself to “win-win” if the stock moves up or down in the short-term 💵

#stocks #investing
___

𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐍𝐎𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐀𝐝𝐯𝐢𝐜𝐞. 𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐚𝐯𝐞 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭.

𝐓𝐡𝐞 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐢𝐬 𝐢𝐧𝐭𝐞𝐧𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐬𝐡𝐨𝐮𝐥𝐝 𝐧𝐨𝐭 𝐛𝐞 𝐜𝐨𝐧𝐬𝐭𝐫𝐮𝐞𝐝 𝐚𝐬 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞 𝐭𝐨 𝐦𝐞𝐞𝐭 𝐭𝐡𝐞 𝐬𝐩𝐞𝐜𝐢𝐟𝐢𝐜 𝐧𝐞𝐞𝐝𝐬 𝐨𝐟 𝐚𝐧𝐲 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥 𝐨𝐫 𝐬𝐢𝐭𝐮𝐚𝐭𝐢𝐨𝐧. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐢𝐬 𝐧𝐨 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐨𝐟 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬.

𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞, 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬 𝐨𝐫 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲. "- Dimitry Nakhla | Babylon Capital®
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⁠Alex Bilzerian
RT @the_old_trader: something deeply & inalterably sinister about an investment manager headquartered in Boston
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⁠Dimitry Nakhla | Babylon Capital®
Given the $SAVE bankruptcy discussions today, here’s a friendly reminder WHY Airlines are the WORST type of investment you can make 👇🏽

#stocks #investing

WHY YOU SHOULD AVOID INVESTING IN AIRLINES ⚠️

First, let’s take a look at the last 5-year returns of 4 major airlines:

1) $AAL -67% (American Airlines)
2) $UAL -32% (United Airlines)
3) $JBLU -63% (JetBlue)
4) $DAL -34% (Delta)

Why do airlines post such poor results for investors? It’s simple. On average, here are the economics of the sector:

COST OF CAPITAL: ~8%
RETURN ON CAPITAL (ROIC): ~4%

Would you want to own a business that pays $8 just to receive $4 in return?

Of course not. Airlines BLEED MONEY EVERY DAY.

As Warren Buffett asserted in his 2007 Shareholder Letter $BRK.B $BRK.A:

“The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think AIRLINES ... The airline industry's demand for capital ever since that first flight has been insatiable.

Investors have poured money into a bottomless pit, attracted by growth when they should have been repelled by it. And I, to my shame, participated in this foolishness when I had Berkshire buy U.S. Air preferred stock in 1989.”

#stocks #investing - Dimitry Nakhla | Babylon Capital®
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⁠Quiver Quantitative
BREAKING: Representative Josh Gottheimer has bought PayPal stock.

Gottheimer sits on the House Financial Services Committee. https://t.co/IEndvl8szf
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⁠Value Spotlight (Andrew Sather)
Why did Starbucks' ROIC Decline? (Tutorial for $SBUX)

Operating Leases and Historical ROIC https://t.co/ZPT8Y2wCLY
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⁠Investing visuals
Microsoft $MSFT: a cloud giant and backbone of countless businesses — all at a reasonable price👇 https://t.co/VaPAMjR5fn
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⁠Stock Analysis Compilation
Stock Analysis Compilation #58 is in your inbox 🔥
(link below)
53 free analyses from the best hedge funds & newsletters :
$ALCO $GOOGL $BA $CSPG $COST $FICO $FSLR $GRNT $HIMS $IDXX $MANU $MELI $MEG $NNE $NFE $NEXA $NKE $NU $OCC $PLTR $PAM $PAYC $PBI $PLTK $TALK $TSLA $DIS $UI $VTNR $WSC $CIFR and many more
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⁠Quiver Quantitative
Spirit Airlines stock, $SAVE, is down 27% today.

It has now fallen 75% since Dave Portnoy announced his massive purchase of the stock. https://t.co/6fpUgubJP9
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⁠Librarian Capital
Ulta Beauty $ULTA COO Kecia Steelman:

"We're starting to see more and more that these younger consumers, age of 9, 10, are actually educating their parents on what's new, and what's hot, and what they should be using." (Oppenheimer conference, Jun-24)

What?
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