LAM RESEARCH CORP (LRCX) Stock Fundamental Analysis
USA - NASDAQ:LRCX - US5128073062 - Common Stock
144.78 USD
+6.47 (+4.68%)
146.5 USD
+1.72 (+1.19%)
We assign a fundamental rating of 7 out of 10 to LRCX. LRCX was compared to 112 industry peers in the Semiconductors & Semiconductor Equipment industry. LRCX scores excellent on profitability, but there are some minor concerns on its financial health. LRCX is not overvalued while it is showing excellent growth. This is an interesting combination. These ratings would make LRCX suitable for growth investing!
1. Profitability
1.1 Basic Checks
LRCX had positive earnings in the past year.
In the past year LRCX had a positive cash flow from operations.
Each year in the past 5 years LRCX has been profitable.
LRCX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
LRCX has a Return On Assets of 25.10%. This is amongst the best in the industry. LRCX outperforms 96.43% of its industry peers.
The Return On Equity of LRCX (54.33%) is better than 95.54% of its industry peers.
With an excellent Return On Invested Capital value of 35.49%, LRCX belongs to the best of the industry, outperforming 98.21% of the companies in the same industry.
LRCX had an Average Return On Invested Capital over the past 3 years of 31.47%. This is significantly above the industry average of 10.94%.
The 3 year average ROIC (31.47%) for LRCX is below the current ROIC(35.49%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 25.1% | ||
| ROE | 54.33% | ||
| ROIC | 35.49% |
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
LRCX has a better Profit Margin (29.06%) than 89.29% of its industry peers.
In the last couple of years the Profit Margin of LRCX has grown nicely.
LRCX's Operating Margin of 32.01% is amongst the best of the industry. LRCX outperforms 91.96% of its industry peers.
In the last couple of years the Operating Margin of LRCX has grown nicely.
With a decent Gross Margin value of 48.70%, LRCX is doing good in the industry, outperforming 60.71% of the companies in the same industry.
LRCX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 32.01% | ||
| PM (TTM) | 29.06% | ||
| GM | 48.71% |
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), LRCX is creating value.
Compared to 1 year ago, LRCX has less shares outstanding
The number of shares outstanding for LRCX has been reduced compared to 5 years ago.
LRCX has a better debt/assets ratio than last year.
2.2 Solvency
The Debt to FCF ratio of LRCX is 0.83, which is an excellent value as it means it would take LRCX, only 0.83 years of fcf income to pay off all of its debts.
LRCX's Debt to FCF ratio of 0.83 is fine compared to the rest of the industry. LRCX outperforms 76.79% of its industry peers.
A Debt/Equity ratio of 0.38 indicates that LRCX is not too dependend on debt financing.
LRCX has a Debt to Equity ratio of 0.38. This is in the lower half of the industry: LRCX underperforms 65.18% 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 0.83 | ||
| Altman-Z | N/A |
ROIC/WACC3.07
WACC11.54%
2.3 Liquidity
LRCX has a Current Ratio of 2.21. This indicates that LRCX is financially healthy and has no problem in meeting its short term obligations.
LRCX has a Current ratio of 2.21. This is in the lower half of the industry: LRCX underperforms 68.75% of its industry peers.
A Quick Ratio of 1.55 indicates that LRCX should not have too much problems paying its short term obligations.
The Quick ratio of LRCX (1.55) is worse than 67.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.21 | ||
| Quick Ratio | 1.55 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 36.63% over the past year.
Measured over the past years, LRCX shows a very strong growth in Earnings Per Share. The EPS has been growing by 21.02% on average per year.
LRCX shows a strong growth in Revenue. In the last year, the Revenue has grown by 23.68%.
The Revenue has been growing by 12.91% on average over the past years. This is quite good.
EPS 1Y (TTM)36.63%
EPS 3Y7.72%
EPS 5Y21.02%
EPS Q2Q%63.39%
Revenue 1Y (TTM)23.68%
Revenue growth 3Y2.29%
Revenue growth 5Y12.91%
Sales Q2Q%33.58%
3.2 Future
LRCX is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.67% yearly.
The Revenue is expected to grow by 8.28% on average over the next years. This is quite good.
EPS Next Y10.59%
EPS Next 2Y12.33%
EPS Next 3Y13.55%
EPS Next 5Y16.67%
Revenue Next Year10.04%
Revenue Next 2Y10%
Revenue Next 3Y9.65%
Revenue Next 5Y8.28%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 34.97, LRCX can be considered very expensive at the moment.
Based on the Price/Earnings ratio, LRCX is valued a bit cheaper than the industry average as 70.54% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of LRCX to the average of the S&P500 Index (27.53), we can say LRCX is valued slightly more expensively.
A Price/Forward Earnings ratio of 31.62 indicates a quite expensive valuation of LRCX.
LRCX's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.04, LRCX is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.97 | ||
| Fwd PE | 31.62 |
4.2 Price Multiples
LRCX's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. LRCX is cheaper than 65.18% of the companies in the same industry.
75.89% of the companies in the same industry are more expensive than LRCX, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.81 | ||
| EV/EBITDA | 28.74 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates LRCX does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of LRCX may justify a higher PE ratio.
A more expensive valuation may be justified as LRCX's earnings are expected to grow with 13.55% in the coming years.
PEG (NY)3.3
PEG (5Y)1.66
EPS Next 2Y12.33%
EPS Next 3Y13.55%
5. Dividend
5.1 Amount
LRCX has a yearly dividend return of 0.74%, which is pretty low.
Compared to an average industry Dividend Yield of 2.15, LRCX pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.40, LRCX's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.74% |
5.2 History
The dividend of LRCX is nicely growing with an annual growth rate of 14.54%!
LRCX has been paying a dividend for at least 10 years, so it has a reliable track record.
LRCX has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)14.54%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
LRCX pays out 21.45% of its income as dividend. This is a sustainable payout ratio.
The dividend of LRCX is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP21.45%
EPS Next 2Y12.33%
EPS Next 3Y13.55%
144.78
+6.47 (+4.68%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners89.15%
Inst Owner Change0.2%
Ins Owners0.26%
Ins Owner Change-0.14%
Market Cap182.57B
Analysts80
Price Target118.66 (-18.04%)
Short Float %2.47%
Short Ratio2.65
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.74% |
Yearly Dividend0.89
Dividend Growth(5Y)14.54%
DP21.45%
Div Incr Years10
Div Non Decr Years10
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.6%
Min EPS beat(2)1.42%
Max EPS beat(2)7.79%
EPS beat(4)4
Avg EPS beat(4)3.92%
Min EPS beat(4)1.42%
Max EPS beat(4)7.79%
EPS beat(8)8
Avg EPS beat(8)4.87%
EPS beat(12)12
Avg EPS beat(12)5.99%
EPS beat(16)13
Avg EPS beat(16)5.29%
Revenue beat(2)1
Avg Revenue beat(2)0.41%
Min Revenue beat(2)-0.4%
Max Revenue beat(2)1.22%
Revenue beat(4)2
Avg Revenue beat(4)0.3%
Min Revenue beat(4)-0.48%
Max Revenue beat(4)1.22%
Revenue beat(8)3
Avg Revenue beat(8)-0.04%
Revenue beat(12)6
Avg Revenue beat(12)0.21%
Revenue beat(16)7
Avg Revenue beat(16)-0.27%
PT rev (1m)6.1%
PT rev (3m)24.88%
EPS NQ rev (1m)0%
EPS NQ rev (3m)22.15%
EPS NY rev (1m)0.47%
EPS NY rev (3m)10.71%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)12.62%
Revenue NY rev (1m)0.5%
Revenue NY rev (3m)7.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.97 | ||
| Fwd PE | 31.62 | ||
| P/S | 9.9 | ||
| P/FCF | 33.81 | ||
| P/OCF | 29.64 | ||
| P/B | 18.51 | ||
| P/tB | 22.67 | ||
| EV/EBITDA | 28.74 |
EPS(TTM)4.14
EY2.86%
EPS(NY)4.58
Fwd EY3.16%
FCF(TTM)4.28
FCFY2.96%
OCF(TTM)4.88
OCFY3.37%
SpS14.62
BVpS7.82
TBVpS6.39
PEG (NY)3.3
PEG (5Y)1.66
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 25.1% | ||
| ROE | 54.33% | ||
| ROCE | 39.93% | ||
| ROIC | 35.49% | ||
| ROICexc | 62.53% | ||
| ROICexgc | 79.72% | ||
| OM | 32.01% | ||
| PM (TTM) | 29.06% | ||
| GM | 48.71% | ||
| FCFM | 29.29% |
ROA(3y)23.18%
ROA(5y)24.18%
ROE(3y)51.37%
ROE(5y)58.46%
ROIC(3y)31.47%
ROIC(5y)32.89%
ROICexc(3y)52.82%
ROICexc(5y)54.36%
ROICexgc(3y)66.54%
ROICexgc(5y)68.82%
ROCE(3y)35.41%
ROCE(5y)37.02%
ROICexcg growth 3Y7.04%
ROICexcg growth 5Y0.35%
ROICexc growth 3Y5.47%
ROICexc growth 5Y4.28%
OM growth 3Y0.81%
OM growth 5Y3.76%
PM growth 3Y2.83%
PM growth 5Y5.33%
GM growth 3Y2.15%
GM growth 5Y1.2%
F-Score8
Asset Turnover0.86
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 0.83 | ||
| Debt/EBITDA | 0.59 | ||
| Cap/Depr | 196.54% | ||
| Cap/Sales | 4.12% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 97.97% | ||
| Profit Quality | 100.79% | ||
| Current Ratio | 2.21 | ||
| Quick Ratio | 1.55 | ||
| Altman-Z | N/A |
F-Score8
WACC11.54%
ROIC/WACC3.07
Cap/Depr(3y)151.1%
Cap/Depr(5y)146.11%
Cap/Sales(3y)3.22%
Cap/Sales(5y)3.04%
Profit Quality(3y)105.22%
Profit Quality(5y)90.8%
High Growth Momentum
Growth
EPS 1Y (TTM)36.63%
EPS 3Y7.72%
EPS 5Y21.02%
EPS Q2Q%63.39%
EPS Next Y10.59%
EPS Next 2Y12.33%
EPS Next 3Y13.55%
EPS Next 5Y16.67%
Revenue 1Y (TTM)23.68%
Revenue growth 3Y2.29%
Revenue growth 5Y12.91%
Sales Q2Q%33.58%
Revenue Next Year10.04%
Revenue Next 2Y10%
Revenue Next 3Y9.65%
Revenue Next 5Y8.28%
EBIT growth 1Y36.42%
EBIT growth 3Y3.12%
EBIT growth 5Y17.15%
EBIT Next Year16.89%
EBIT Next 3Y13.89%
EBIT Next 5Y10.27%
FCF growth 1Y26.9%
FCF growth 3Y28.36%
FCF growth 5Y22.94%
OCF growth 1Y32.4%
OCF growth 3Y25.72%
OCF growth 5Y23.7%