LAM RESEARCH CORP (1LRCX.MI) Stock Fundamental Analysis
Europe - Euronext Milan - BIT:1LRCX - US5128073062 - Common Stock
188.68 EUR
-4.82 (-2.49%)
Overall 1LRCX gets a fundamental rating of 6 out of 10. We evaluated 1LRCX against 68 industry peers in the Semiconductors & Semiconductor Equipment industry. While 1LRCX belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. 1LRCX is valued quite expensively, but it does show have an excellent growth rating. These ratings could make 1LRCX a good candidate for growth investing.
1. Profitability
1.1 Basic Checks
- 1LRCX had positive earnings in the past year.
- In the past year 1LRCX had a positive cash flow from operations.
- Each year in the past 5 years 1LRCX has been profitable.
- Each year in the past 5 years 1LRCX had a positive operating cash flow.
1.2 Ratios
- With an excellent Return On Assets value of 26.53%, 1LRCX belongs to the best of the industry, outperforming 95.59% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 57.01%, 1LRCX belongs to the top of the industry, outperforming 95.59% of the companies in the same industry.
- With an excellent Return On Invested Capital value of 37.82%, 1LRCX belongs to the best of the industry, outperforming 94.12% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for 1LRCX is significantly above the industry average of 14.62%.
- The last Return On Invested Capital (37.82%) for 1LRCX is above the 3 year average (31.47%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 26.53% | ||
| ROE | 57.01% | ||
| ROIC | 37.82% |
ROA(3y)23.18%
ROA(5y)24.18%
ROE(3y)51.37%
ROE(5y)58.46%
ROIC(3y)31.47%
ROIC(5y)32.89%
1.3 Margins
- 1LRCX has a better Profit Margin (29.66%) than 83.82% of its industry peers.
- In the last couple of years the Profit Margin of 1LRCX has grown nicely.
- Looking at the Operating Margin, with a value of 33.00%, 1LRCX belongs to the top of the industry, outperforming 85.29% of the companies in the same industry.
- 1LRCX's Operating Margin has improved in the last couple of years.
- With a Gross Margin value of 49.31%, 1LRCX perfoms like the industry average, outperforming 54.41% of the companies in the same industry.
- 1LRCX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 33% | ||
| PM (TTM) | 29.66% | ||
| GM | 49.31% |
OM growth 3Y0.81%
OM growth 5Y3.76%
PM growth 3Y2.83%
PM growth 5Y5.33%
GM growth 3Y2.15%
GM growth 5Y1.2%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), 1LRCX is creating value.
- The number of shares outstanding for 1LRCX has been reduced compared to 1 year ago.
- 1LRCX has less shares outstanding than it did 5 years ago.
- 1LRCX has a better debt/assets ratio than last year.
2.2 Solvency
- 1LRCX has a debt to FCF ratio of 0.81. This is a very positive value and a sign of high solvency as it would only need 0.81 years to pay back of all of its debts.
- 1LRCX has a better Debt to FCF ratio (0.81) than 77.94% of its industry peers.
- 1LRCX has a Debt/Equity ratio of 0.37. This is a healthy value indicating a solid balance between debt and equity.
- With a Debt to Equity ratio value of 0.37, 1LRCX is not doing good in the industry: 63.24% of the companies in the same industry are doing better.
- Although 1LRCX does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | 0.81 | ||
| Altman-Z | N/A |
ROIC/WACC3.5
WACC10.81%
2.3 Liquidity
- 1LRCX has a Current Ratio of 2.21. This indicates that 1LRCX is financially healthy and has no problem in meeting its short term obligations.
- 1LRCX's Current ratio of 2.21 is in line compared to the rest of the industry. 1LRCX outperforms 44.12% of its industry peers.
- 1LRCX has a Quick Ratio of 1.60. This is a normal value and indicates that 1LRCX is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 1.60, 1LRCX is doing worse than 60.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.21 | ||
| Quick Ratio | 1.6 |
3. Growth
3.1 Past
- 1LRCX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 41.65%, which is quite impressive.
- Measured over the past years, 1LRCX shows a very strong growth in Earnings Per Share. The EPS has been growing by 21.02% on average per year.
- Looking at the last year, 1LRCX shows a very strong growth in Revenue. The Revenue has grown by 25.66%.
- 1LRCX shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 12.91% yearly.
EPS 1Y (TTM)41.65%
EPS 3Y7.72%
EPS 5Y21.02%
EPS Q2Q%46.51%
Revenue 1Y (TTM)25.66%
Revenue growth 3Y2.29%
Revenue growth 5Y12.91%
Sales Q2Q%27.74%
3.2 Future
- 1LRCX is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.46% yearly.
- Based on estimates for the next years, 1LRCX will show a quite strong growth in Revenue. The Revenue will grow by 9.82% on average per year.
EPS Next Y19.4%
EPS Next 2Y18.27%
EPS Next 3Y15.91%
EPS Next 5Y13.46%
Revenue Next Year16.29%
Revenue Next 2Y15.36%
Revenue Next 3Y12.73%
Revenue Next 5Y9.82%
3.3 Evolution
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 48.63 indicates a quite expensive valuation of 1LRCX.
- 1LRCX's Price/Earnings ratio is a bit more expensive when compared to the industry. 1LRCX is more expensive than 63.24% of the companies in the same industry.
- 1LRCX's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.30.
- Based on the Price/Forward Earnings ratio of 38.14, the valuation of 1LRCX can be described as expensive.
- Based on the Price/Forward Earnings ratio, 1LRCX is valued a bit more expensive than 64.71% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 24.32. 1LRCX is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.63 | ||
| Fwd PE | 38.14 |
4.2 Price Multiples
- 1LRCX's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. 1LRCX is more expensive than 70.59% of the companies in the same industry.
- 1LRCX's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 49.98 | ||
| EV/EBITDA | 40.12 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates 1LRCX does not grow enough to justify the current Price/Earnings ratio.
- 1LRCX has an outstanding profitability rating, which may justify a higher PE ratio.
- A more expensive valuation may be justified as 1LRCX's earnings are expected to grow with 15.91% in the coming years.
PEG (NY)2.51
PEG (5Y)2.31
EPS Next 2Y18.27%
EPS Next 3Y15.91%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.48%, 1LRCX is not a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 0.72, 1LRCX has a dividend in line with its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, 1LRCX's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.48% |
5.2 History
- On average, the dividend of 1LRCX grows each year by 14.54%, which is quite nice.
Dividend Growth(5Y)14.54%
Div Incr YearsN/A
Div Non Decr YearsN/A
5.3 Sustainability
- 1LRCX pays out 20.32% of its income as dividend. This is a sustainable payout ratio.
- 1LRCX's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP20.32%
EPS Next 2Y18.27%
EPS Next 3Y15.91%
LAM RESEARCH CORP / 1LRCX.MI FAQ
Can you provide the ChartMill fundamental rating for LAM RESEARCH CORP?
ChartMill assigns a fundamental rating of 6 / 10 to 1LRCX.MI.
What is the valuation status of LAM RESEARCH CORP (1LRCX.MI) stock?
ChartMill assigns a valuation rating of 2 / 10 to LAM RESEARCH CORP (1LRCX.MI). This can be considered as Overvalued.
Can you provide the profitability details for LAM RESEARCH CORP?
LAM RESEARCH CORP (1LRCX.MI) has a profitability rating of 9 / 10.
What is the financial health of LAM RESEARCH CORP (1LRCX.MI) stock?
The financial health rating of LAM RESEARCH CORP (1LRCX.MI) is 6 / 10.
How sustainable is the dividend of LAM RESEARCH CORP (1LRCX.MI) stock?
The dividend rating of LAM RESEARCH CORP (1LRCX.MI) is 3 / 10 and the dividend payout ratio is 20.32%.