220.7 USD
-7.69 (-3.37%)
218.5 USD
-2.2 (-1%)
Overall LRCX gets a fundamental rating of 7 out of 10. We evaluated LRCX against 113 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 growing strongly while it is still valued neutral. This is a good combination! These ratings would make LRCX suitable for growth investing!
1. Profitability
1.1 Basic Checks
- LRCX had positive earnings in the past year.
- LRCX had a positive operating cash flow in the past year.
- LRCX had positive earnings in each of the past 5 years.
- In the past 5 years LRCX always reported a positive cash flow from operatings.
1.2 Ratios
- LRCX's Return On Assets of 26.53% is amongst the best of the industry. LRCX outperforms 98.23% of its industry peers.
- The Return On Equity of LRCX (57.01%) is better than 96.46% of its industry peers.
- LRCX has a Return On Invested Capital of 37.82%. This is amongst the best in the industry. LRCX outperforms 98.23% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for LRCX is significantly above the industry average of 10.75%.
- The 3 year average ROIC (31.47%) for LRCX is below the current ROIC(37.82%), indicating increased profibility in the last year.
| 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
- Looking at the Profit Margin, with a value of 29.66%, LRCX belongs to the top of the industry, outperforming 89.38% of the companies in the same industry.
- In the last couple of years the Profit Margin of LRCX has grown nicely.
- The Operating Margin of LRCX (33.00%) is better than 92.04% of its industry peers.
- LRCX's Operating Margin has improved in the last couple of years.
- LRCX's Gross Margin of 49.31% is fine compared to the rest of the industry. LRCX outperforms 61.06% of its industry peers.
- LRCX'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
- LRCX has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it 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
- LRCX 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.
- LRCX has a Debt to FCF ratio of 0.81. This is in the better half of the industry: LRCX outperforms 78.76% of its industry peers.
- LRCX has a Debt/Equity ratio of 0.37. This is a healthy value indicating a solid balance between debt and equity.
- LRCX's Debt to Equity ratio of 0.37 is on the low side compared to the rest of the industry. LRCX is outperformed by 65.49% 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 | 0.37 | ||
| Debt/FCF | 0.81 | ||
| Altman-Z | N/A |
ROIC/WACC3.5
WACC10.81%
2.3 Liquidity
- A Current Ratio of 2.21 indicates that LRCX has no problem at all paying its short term obligations.
- LRCX has a worse Current ratio (2.21) than 71.68% of its industry peers.
- LRCX has a Quick Ratio of 1.60. This is a normal value and indicates that LRCX is financially healthy and should not expect problems in meeting its short term obligations.
- LRCX has a worse Quick ratio (1.60) than 70.80% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.21 | ||
| Quick Ratio | 1.6 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 41.65% over the past year.
- The Earnings Per Share has been growing by 21.02% on average over the past years. This is a very strong growth
- LRCX shows a strong growth in Revenue. In the last year, the Revenue has grown by 25.66%.
- The Revenue has been growing by 12.91% on average over the past years. This is quite good.
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
- LRCX is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.46% yearly.
- The Revenue is expected to grow by 9.82% on average over the next years. This is quite good.
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.
- 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
- A Price/Earnings ratio of 48.61 indicates a quite expensive valuation of LRCX.
- Based on the Price/Earnings ratio, LRCX is valued a bit cheaper than 65.49% of the companies in the same industry.
- When comparing the Price/Earnings ratio of LRCX to the average of the S&P500 Index (27.30), we can say LRCX is valued expensively.
- A Price/Forward Earnings ratio of 38.11 indicates a quite expensive valuation of LRCX.
- LRCX's Price/Forward Earnings is on the same level as the industry average.
- LRCX's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 24.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.61 | ||
| Fwd PE | 38.11 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, LRCX is valued a bit cheaper than 62.83% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, LRCX is valued a bit cheaper than the industry average as 71.68% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 49.95 | ||
| EV/EBITDA | 40.09 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The excellent profitability rating of LRCX may justify a higher PE ratio.
- LRCX's earnings are expected to grow with 15.91% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.51
PEG (5Y)2.31
EPS Next 2Y18.27%
EPS Next 3Y15.91%
5. Dividend
5.1 Amount
- LRCX has a yearly dividend return of 0.48%, which is pretty low.
- Compared to an average industry Dividend Yield of 0.51, LRCX pays a bit more dividend than its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, LRCX's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.48% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)14.54%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
- 20.32% of the earnings are spent on dividend by LRCX. This is a low number and sustainable payout ratio.
- The dividend of LRCX is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP20.32%
EPS Next 2Y18.27%
EPS Next 3Y15.91%
LAM RESEARCH CORP / LRCX FAQ
What is the fundamental rating for LRCX stock?
ChartMill assigns a fundamental rating of 7 / 10 to LRCX.
What is the valuation status of LAM RESEARCH CORP (LRCX) stock?
ChartMill assigns a valuation rating of 4 / 10 to LAM RESEARCH CORP (LRCX). This can be considered as Fairly Valued.
How profitable is LAM RESEARCH CORP (LRCX) stock?
LAM RESEARCH CORP (LRCX) has a profitability rating of 9 / 10.
What is the valuation of LAM RESEARCH CORP based on its PE and PB ratios?
The Price/Earnings (PE) ratio for LAM RESEARCH CORP (LRCX) is 48.61 and the Price/Book (PB) ratio is 27.2.
What is the earnings growth outlook for LAM RESEARCH CORP?
The Earnings per Share (EPS) of LAM RESEARCH CORP (LRCX) is expected to grow by 19.4% in the next year.