At today's price, ASML's stock is pricing in about 25.1% annual free-cash-flow growth for the next ten years — roughly 1.7 times its actual 5-year revenue growth rate (15.1% a year) and about 9 times its actual 5-year free-cash-flow growth rate (2.7% a year, though that figure was dragged down by one working-capital-heavy year).
At its current price, ASML implies ~25.1% annual FCF growth for the next 10 years, discounted at 10%.
ASML's actual free-cash-flow growth has averaged just 2.7% a year over the past 5 years; revenue grew 15.1% a year over the same span.
Required growth vs. historical growth
Required growth from the reverse DCF below, using FCF normalized to the 3-year average (see methodology). Historical figures from Form 20-F FY2025 (revenue and FCF, 2021-2025). All figures originally reported in euros; converted to dollars only for the share-price comparison, using the Aug 31, 2026 EUR/USD rate of 1.1615.
Sensitivity: what if the discount rate moves?
| WACC | Required growth |
|---|---|
| 8% | 19.8% |
| 10% (base case) | 25.1% |
| 12% | 29.7% |
Across the entire 8-12% range tested, the required growth rate stays in the 20-30% band — no reasonable discount-rate assumption brings the market's ask down anywhere near ASML's actual 5-year performance.
What would move this number
- Using 2025's actual FCF (€11.0bn) instead of the normalized 3-year average (€7.8bn) lowers the required growth rate to 17.9% at a 9% discount rate. Since 2025's FCF ran 41.6% above the 3-year average — past this analysis's normalization threshold — the unadjusted figure is shown here only for reference, not used as the base case.
- The share count used (385.4M, as of Dec 31, 2025) is about 8 months old relative to the August 2026 share price — if ASML has continued repurchasing shares since then, the true required growth rate today would be very slightly lower than shown.
- Raising the terminal growth rate from 2.5% to 3% would modestly lower the required 10-year growth rate, since more of the total value would then come from the higher terminal-value assumption.
Show your work
Inputs, sources, model assumptions, and the calculation
- Share price$1,696.01 (€1,460.19) — Nasdaq, Aug 31, 2026 close
- EUR/USD exchange rate1.1615 — Aug 31, 2026
- Shares outstanding385,417,665 — Form 20-F FY2025, p.280 (as of Dec 31, 2025)
- Market cap€562.8bn (≈$653.7bn) — price × shares (calculated)
- Base FCF (3-year average, normalized)€7,785.9M — FY2023 (€3,247.2M), FY2024 (€9,083.1M), FY2025 (€11,027.3M), averaged
- Cash + short-term investments (year-end 2025)€13,321.9M — 20-F FY2025, p.290
- Total debt (year-end 2025, book value)€3,699.2M — 20-F FY2025, p.300
- Net debt-€9,622.7M (net cash) — calculated
- Discount rate (WACC)10% base case (8%/12% tested)
- Terminal growth rate2.5% — long-run GDP-level assumption
Normalization check: 2025 FCF (€11,027.3M) is +41.6% above the three-year average (€7,785.9M) — beyond the ±40% threshold, so the 3-year average was used as the base case per standard normalization practice.
Model: free cash flow is assumed to grow at a constant annual rate g for 10 years, then at a 2.5% terminal rate thereafter, solved by bisection for the value of g that equates present value to today's target enterprise value (market cap plus net debt).
Historical CAGR check: 5-yr revenue CAGR = (€32,667.3M ÷ €18,611.0M)^(1/4) − 1 = 15.1%. 5-yr FCF CAGR = (€11,027.3M ÷ €9,905.5M)^(1/4) − 1 = 2.7%. 3-yr FCF CAGR (2022→2025) = (€11,027.3M ÷ €7,167.5M)^(1/3) − 1 = 15.4%.
The fine print
- This isn't a fair-value price target — it only shows what the current price already assumes.
- Change the discount rate or the FCF base period, and the answer moves — see the sensitivity table above.
- ASML reports in euros; this analysis converts to dollars only for the share-price comparison, using the Aug 31, 2026 EUR/USD rate — a materially different exchange rate would change the dollar figures shown, though not the underlying euro-denominated growth-rate math.
- Whether 25.1% growth is realistic depends on whether AI-driven demand and rising High-NA EUV prices hold up for a full decade — not on this math alone.
- Any investment decision, and its outcome, is your own responsibility.
Frequently asked questions
What growth rate does ASML's stock price assume?
At today's price, ASML's stock is pricing in about 25.1% annual free-cash-flow growth for the next ten years, at a 10% discount rate, using a normalized free-cash-flow base.
How does that compare to ASML's actual growth?
ASML's actual 5-year revenue CAGR was 15.1% a year — well below the 25.1% the price requires. Its 5-year FCF CAGR was just 2.7%, though that's held down by a single working-capital-heavy year (2023); even the friendlier 3-year FCF CAGR (15.4%) still falls short of what the price demands.
What share price was used for this analysis?
This analysis used $1,696.01 (€1,460.19 equivalent), as of the Aug 31, 2026 close.