Don't overlook LAM RESEARCH CORP (NASDAQ:LRCX)—a stock with solid growth prospects and a reasonable valuation.

Here's LAM RESEARCH CORP (NASDAQ:LRCX) for you, a growth stock our stock screener believes is undervalued. LRCX is scoring impressively in terms of growth while demonstrating strong financials. On top of that, it remains attractively priced. Let's break it down further.

Assessing Growth for LRCX

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. LRCX has earned a 7 for growth:

• LRCX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 23.01%, which is quite impressive.
• Measured over the past years, LRCX shows a quite strong growth in Earnings Per Share. The EPS has been growing by 15.80% on average per year.
• The Revenue has grown by 13.21% in the past year. This is quite good.
• LRCX shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.08% yearly.
• Based on estimates for the next years, LRCX will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.50% on average per year.
• LRCX is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.63% yearly.

ChartMill's Evaluation of Valuation

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. LRCX has achieved a 6 out of 10:

• 73.39% of the companies in the same industry are more expensive than LRCX, based on the Price/Earnings ratio.
• LRCX is valuated rather cheaply when we compare the Price/Earnings ratio to 28.59, which is the current average of the S&P500 Index.
• Based on the Price/Forward Earnings ratio, LRCX is valued a bit cheaper than the industry average as 76.15% of the companies are valued more expensively.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of LRCX indicates a somewhat cheap valuation: LRCX is cheaper than 66.97% of the companies listed in the same industry.
• Based on the Price/Free Cash Flow ratio, LRCX is valued cheaply inside the industry as 81.65% of the companies are valued more expensively.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• LRCX has an outstanding profitability rating, which may justify a higher PE ratio.
• A more expensive valuation may be justified as LRCX's earnings are expected to grow with 16.61% in the coming years.

ChartMill's Evaluation of Health

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of LRCX, the assigned 6 reflects its health status:

• An Altman-Z score of 8.77 indicates that LRCX is not in any danger for bankruptcy at the moment.
• LRCX has a Altman-Z score of 8.77. This is in the better half of the industry: LRCX outperforms 79.82% of its industry peers.
• LRCX has a debt to FCF ratio of 1.23. This is a very positive value and a sign of high solvency as it would only need 1.23 years to pay back of all of its debts.
• LRCX's Debt to FCF ratio of 1.23 is fine compared to the rest of the industry. LRCX outperforms 73.39% of its industry peers.
• Even though the debt/equity ratio score it not favorable for LRCX, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
• LRCX has a Current Ratio of 2.54. This indicates that LRCX is financially healthy and has no problem in meeting its short term obligations.

Profitability Insights: LRCX

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. LRCX has earned a 9 out of 10:

• Looking at the Return On Assets, with a value of 21.64%, LRCX belongs to the top of the industry, outperforming 95.41% of the companies in the same industry.
• LRCX has a Return On Equity of 48.75%. This is amongst the best in the industry. LRCX outperforms 94.50% of its industry peers.
• The Return On Invested Capital of LRCX (29.27%) is better than 97.25% of its industry peers.
• The Average Return On Invested Capital over the past 3 years for LRCX is significantly above the industry average of 11.33%.
• LRCX has a better Profit Margin (26.49%) than 87.16% of its industry peers.
• In the last couple of years the Profit Margin of LRCX has grown nicely.
• With an excellent Operating Margin value of 29.72%, LRCX belongs to the best of the industry, outperforming 90.83% of the companies in the same industry.
• LRCX's Operating Margin has improved in the last couple of years.
• LRCX has a better Gross Margin (47.73%) than 60.55% of its industry peers.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

Check the latest full fundamental report of LRCX for a complete fundamental analysis.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.