ASX

We rate ASE Technology Holding Co., Ltd. (ASX) as a Buy with a composite score of 73.5/100 at a current price of $24.94. The stock scores above average across the majority of our six quantitative factors and ranks #26 out of 7,333 stocks in our universe, reflecting a favorable risk-reward profile.

The rating is primarily driven by strength in value (90th percentile) and momentum (85th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (36th percentile) and stability (65th percentile) tempers our overall conviction. We assign a Narrow Moat rating (56/100), Medium uncertainty, and Exemplary capital allocation.

Key items to watch: whether strong momentum is fundamentally supported by revenue trends. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

ASE Technology Holding Co., Ltd. holds an above-average position (#13 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 73.5/100 places it at rank #26 in our full 7,333-stock universe. With a $21.3B market capitalization, ASE Technology Holding Co., Ltd. operates at meaningful scale within the Manufacturing sector, providing competitive advantages in distribution, procurement, and customer reach.

Despite positive momentum (85th percentile), revenue contraction of -4% creates a divergence between price action and fundamental trajectory. This divergence suggests either that the market is looking through near-term weakness or that technical factors are temporarily inflating the stock. Investors should assess whether the revenue decline reflects cyclical weakness or structural challenges.

The margin cascade tells an important story: gross margins of 16% (-26.2pp vs sector) narrow to operating margins of 7% (+5.5pp vs sector) and net margins of 5.7%, yielding a gross-to-net conversion rate of 35%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $24.94, ASE Technology Holding Co., Ltd. appears undervalued relative to its fundamentals. Our value factor score of 90/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at a P/E of 1118.1x (a 4925% premium to the sector median of 22.3x), EV/EBITDA of 4.4x (discounted to peers), P/B of 5.4x, P/S of 0.7x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a Medium uncertainty rating to ASE Technology Holding Co., Ltd.. The stock presents a balanced risk profile: elevated market sensitivity (beta of 1.33) and elevated valuation multiple (P/E 1118.1x) that leaves limited margin for error. While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: elevated market sensitivity (beta of 1.33); elevated valuation multiple (P/E 1118.1x) that leaves limited margin for error. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 65th percentile and quality factor at the 75th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: above-average stability (65th percentile) suggests predictable business dynamics; a 3.25% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate ASE Technology Holding Co., Ltd.'s capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 42.3%, a 3.25% dividend yield. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — ASE Technology Holding Co., Ltd. meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. The company returns capital via a 3.25% dividend yield, and the combination of 18.3% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, ASE Technology Holding Co., Ltd. receives a Buy rating with a composite score of 73.5/100 (rank #26 of 7,333). Our quantitative framework assigns a Narrow Moat (56/100, trend: stable), Medium uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 70/100.

Our analysis supports a constructive view on ASE Technology Holding Co., Ltd.. The combination of identifiable competitive advantages, medium uncertainty, and exemplary capital allocation creates a risk-reward profile that favors accumulation at current levels. We recommend investors consider adding this name to portfolios aligned with the stock's risk profile.