LAM RESEARCH CORP (LRCX) Stock Fundamental Analysis
NASDAQ:LRCX - Nasdaq - US5128073062 - Common Stock - Currency: USD
Taking everything into account, LRCX scores 7 out of 10 in our fundamental rating. LRCX was compared to 110 industry peers in the Semiconductors & Semiconductor Equipment industry. LRCX scores excellent points on both the profitability and health parts. This is a solid base for a good stock. LRCX is not priced too expensively while it is growing strongly. Keep and eye on this one! These ratings could make LRCX a good candidate for growth and quality 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.
In the past 5 years LRCX always reported a positive cash flow from operatings.
1.2 Ratios
LRCX has a Return On Assets of 23.33%. This is amongst the best in the industry. LRCX outperforms 95.45% of its industry peers.
LRCX has a better Return On Equity (48.98%) than 95.45% of its industry peers.
LRCX has a better Return On Invested Capital (32.17%) than 98.18% of its industry peers.
The Average Return On Invested Capital over the past 3 years for LRCX is significantly above the industry average of 10.58%.
The last Return On Invested Capital (32.17%) for LRCX is above the 3 year average (31.96%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.33% | ||
| ROE | 48.98% | ||
| ROIC | 32.17% |
ROA(3y)23.74%
ROA(5y)22.26%
ROE(3y)57.71%
ROE(5y)56.3%
ROIC(3y)31.96%
ROIC(5y)29.69%
1.3 Margins
LRCX has a Profit Margin of 27.19%. This is amongst the best in the industry. LRCX outperforms 88.18% of its industry peers.
LRCX's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 30.88%, LRCX belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
In the last couple of years the Operating Margin of LRCX has grown nicely.
LRCX has a Gross Margin (48.06%) which is in line with its industry peers.
LRCX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.88% | ||
| PM (TTM) | 27.19% | ||
| GM | 48.06% |
OM growth 3Y-1.8%
OM growth 5Y2.57%
PM growth 3Y-1.32%
PM growth 5Y2.5%
GM growth 3Y0.77%
GM growth 5Y1.07%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so LRCX is creating value.
The number of shares outstanding for LRCX has been increased compared to 1 year ago.
The number of shares outstanding for LRCX has been increased compared to 5 years ago.
Compared to 1 year ago, LRCX has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 11.29 indicates that LRCX is not in any danger for bankruptcy at the moment.
LRCX has a better Altman-Z score (11.29) than 81.82% of its industry peers.
LRCX has a debt to FCF ratio of 1.18. This is a very positive value and a sign of high solvency as it would only need 1.18 years to pay back of all of its debts.
LRCX has a better Debt to FCF ratio (1.18) than 74.55% of its industry peers.
LRCX has a Debt/Equity ratio of 0.39. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of LRCX (0.39) is worse than 66.36% of its industry peers.
Although LRCX 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 | 0.39 | ||
| Debt/FCF | 1.18 | ||
| Altman-Z | 11.29 |
ROIC/WACC3.21
WACC10.02%
2.3 Liquidity
LRCX has a Current Ratio of 2.45. This indicates that LRCX is financially healthy and has no problem in meeting its short term obligations.
LRCX has a worse Current ratio (2.45) than 64.55% of its industry peers.
A Quick Ratio of 1.64 indicates that LRCX should not have too much problems paying its short term obligations.
LRCX has a worse Quick ratio (1.64) than 68.18% of its industry peers.
The current and quick ratio evaluation for LRCX is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.45 | ||
| Quick Ratio | 1.64 |
3. Growth
3.1 Past
LRCX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 28.78%, which is quite impressive.
LRCX shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.80% yearly.
LRCX shows a strong growth in Revenue. In the last year, the Revenue has grown by 20.33%.
The Revenue has been growing by 9.08% on average over the past years. This is quite good.
EPS 1Y (TTM)28.78%
EPS 3Y3.56%
EPS 5Y15.8%
EPS Q2Q%33.5%
Revenue 1Y (TTM)20.33%
Revenue growth 3Y0.63%
Revenue growth 5Y9.08%
Sales Q2Q%24.43%
3.2 Future
The Earnings Per Share is expected to grow by 15.06% on average over the next years. This is quite good.
Based on estimates for the next years, LRCX will show a quite strong growth in Revenue. The Revenue will grow by 10.38% on average per year.
EPS Next Y35.03%
EPS Next 2Y16.29%
EPS Next 3Y16.49%
EPS Next 5Y15.06%
Revenue Next Year22.76%
Revenue Next 2Y12.13%
Revenue Next 3Y11.84%
Revenue Next 5Y10.38%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last 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 stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 26.74, LRCX can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of LRCX indicates a somewhat cheap valuation: LRCX is cheaper than 69.09% of the companies listed in the same industry.
LRCX is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
LRCX is valuated rather expensively with a Price/Forward Earnings ratio of 23.63.
Based on the Price/Forward Earnings ratio, LRCX is valued a bit cheaper than 62.73% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of LRCX to the average of the S&P500 Index (21.70), we can say LRCX is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.74 | ||
| Fwd PE | 23.63 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, LRCX is valued a bit cheaper than 66.36% 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 72.73% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.64 | ||
| EV/EBITDA | 21.8 |
4.3 Compensation for Growth
LRCX's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
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 16.49% in the coming years.
PEG (NY)0.76
PEG (5Y)1.69
EPS Next 2Y16.29%
EPS Next 3Y16.49%
5. Dividend
5.1 Amount
LRCX has a yearly dividend return of 0.95%, which is pretty low.
Compared to an average industry Dividend Yield of 2.28, LRCX pays a better dividend. On top of this LRCX pays more dividend than 80.91% of the companies listed in the same industry.
With a Dividend Yield of 0.95, LRCX pays less dividend than the S&P500 average, which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.95% |
5.2 History
The dividend of LRCX decreases each year by -20.64%.
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)-20.64%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
LRCX pays out 23.95% of its income as dividend. This is a sustainable payout ratio.
DP23.95%
EPS Next 2Y16.29%
EPS Next 3Y16.49%
96.81
-0.53 (-0.54%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners87.26%
Inst Owner Change3.53%
Ins Owners0.26%
Ins Owner Change7.7%
Market Cap123.83B
Analysts81.08
Price Target95.02 (-1.85%)
Short Float %1.95%
Short Ratio2.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.95% |
Yearly Dividend1.42
Dividend Growth(5Y)-20.64%
DP23.95%
Div Incr Years10
Div Non Decr Years10
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.55%
Min EPS beat(2)1.42%
Max EPS beat(2)1.69%
EPS beat(4)4
Avg EPS beat(4)3.3%
Min EPS beat(4)1.42%
Max EPS beat(4)5.32%
EPS beat(8)8
Avg EPS beat(8)5.85%
EPS beat(12)12
Avg EPS beat(12)6.86%
EPS beat(16)13
Avg EPS beat(16)5.12%
Revenue beat(2)0
Avg Revenue beat(2)-0.44%
Min Revenue beat(2)-0.48%
Max Revenue beat(2)-0.4%
Revenue beat(4)1
Avg Revenue beat(4)-0.18%
Min Revenue beat(4)-0.71%
Max Revenue beat(4)0.87%
Revenue beat(8)3
Avg Revenue beat(8)-0.13%
Revenue beat(12)6
Avg Revenue beat(12)0.77%
Revenue beat(16)7
Avg Revenue beat(16)-0.26%
PT rev (1m)3.97%
PT rev (3m)-2.33%
EPS NQ rev (1m)0%
EPS NQ rev (3m)23.01%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)6.55%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)8.48%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)2.45%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.74 | ||
| Fwd PE | 23.63 | ||
| P/S | 7.23 | ||
| P/FCF | 32.64 | ||
| P/OCF | 27.63 | ||
| P/B | 13.02 | ||
| P/tB | 16.05 | ||
| EV/EBITDA | 21.8 |
EPS(TTM)3.62
EY3.74%
EPS(NY)4.1
Fwd EY4.23%
FCF(TTM)2.97
FCFY3.06%
OCF(TTM)3.5
OCFY3.62%
SpS13.4
BVpS7.44
TBVpS6.03
PEG (NY)0.76
PEG (5Y)1.69
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.33% | ||
| ROE | 48.98% | ||
| ROCE | 36.54% | ||
| ROIC | 32.17% | ||
| ROICexc | 51.6% | ||
| ROICexgc | 64.4% | ||
| OM | 30.88% | ||
| PM (TTM) | 27.19% | ||
| GM | 48.06% | ||
| FCFM | 22.14% |
ROA(3y)23.74%
ROA(5y)22.26%
ROE(3y)57.71%
ROE(5y)56.3%
ROIC(3y)31.96%
ROIC(5y)29.69%
ROICexc(3y)49.28%
ROICexc(5y)51.51%
ROICexgc(3y)61.06%
ROICexgc(5y)67.9%
ROCE(3y)36.3%
ROCE(5y)33.72%
ROICexcg growth 3Y-10.7%
ROICexcg growth 5Y-8.42%
ROICexc growth 3Y-9.22%
ROICexc growth 5Y-2.97%
OM growth 3Y-1.8%
OM growth 5Y2.57%
PM growth 3Y-1.32%
PM growth 5Y2.5%
GM growth 3Y0.77%
GM growth 5Y1.07%
F-Score7
Asset Turnover0.86
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.39 | ||
| Debt/FCF | 1.18 | ||
| Debt/EBITDA | 0.66 | ||
| Cap/Depr | 182.82% | ||
| Cap/Sales | 4.01% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 79.08% | ||
| Profit Quality | 81.44% | ||
| Current Ratio | 2.45 | ||
| Quick Ratio | 1.64 | ||
| Altman-Z | 11.29 |
F-Score7
WACC10.02%
ROIC/WACC3.21
Cap/Depr(3y)140.13%
Cap/Depr(5y)121.94%
Cap/Sales(3y)2.9%
Cap/Sales(5y)2.62%
Profit Quality(3y)90.11%
Profit Quality(5y)87.72%
High Growth Momentum
Growth
EPS 1Y (TTM)28.78%
EPS 3Y3.56%
EPS 5Y15.8%
EPS Q2Q%33.5%
EPS Next Y35.03%
EPS Next 2Y16.29%
EPS Next 3Y16.49%
EPS Next 5Y15.06%
Revenue 1Y (TTM)20.33%
Revenue growth 3Y0.63%
Revenue growth 5Y9.08%
Sales Q2Q%24.43%
Revenue Next Year22.76%
Revenue Next 2Y12.13%
Revenue Next 3Y11.84%
Revenue Next 5Y10.38%
EBIT growth 1Y30.25%
EBIT growth 3Y-1.18%
EBIT growth 5Y11.88%
EBIT Next Year39.66%
EBIT Next 3Y16.98%
EBIT Next 5Y14.11%
FCF growth 1Y-3.99%
FCF growth 3Y9.52%
FCF growth 5Y8.18%
OCF growth 1Y-0.41%
OCF growth 3Y9.04%
OCF growth 5Y7.93%