LAM RESEARCH CORP (LRCX) Stock Fundamental Analysis
USA - NASDAQ:LRCX - US5128073062 - Common Stock
148.26 USD
-5.06 (-3.3%)
148.7 USD
+0.44 (+0.3%)
Taking everything into account, LRCX scores 7 out of 10 in our fundamental rating. 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 growing strongly while it is still valued neutral. This is a good combination! With these ratings, LRCX could be worth investigating further for growth investing!.
1. Profitability
1.1 Basic Checks
In the past year LRCX was profitable.
In the past year LRCX had a positive cash flow from operations.
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 has a better Return On Assets (26.53%) than 97.32% of its industry peers.
LRCX's Return On Equity of 57.01% is amongst the best of the industry. LRCX outperforms 96.43% of its industry peers.
With an excellent Return On Invested Capital value of 37.82%, LRCX belongs to the best of the industry, outperforming 98.21% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for LRCX is significantly above the industry average of 10.93%.
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
LRCX has a Profit Margin of 29.66%. This is amongst the best in the industry. LRCX outperforms 91.07% of its industry peers.
In the last couple of years the Profit Margin of LRCX has grown nicely.
LRCX has a Operating Margin of 33.00%. This is amongst the best in the industry. LRCX outperforms 91.96% of its industry peers.
LRCX's Operating Margin has improved in the last couple of years.
LRCX has a better Gross Margin (49.31%) than 60.71% of its industry peers.
In the last couple of years the Gross Margin of LRCX has remained more or less at the same level.
| 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), 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.
Compared to 1 year ago, LRCX has an improved debt to assets ratio.
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 77.68% 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.
With a Debt to Equity ratio value of 0.37, LRCX is not doing good in the industry: 64.29% of the companies in the same industry are doing better.
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 | 0.37 | ||
| Debt/FCF | 0.81 | ||
| Altman-Z | N/A |
ROIC/WACC3.53
WACC10.71%
2.3 Liquidity
A Current Ratio of 2.21 indicates that LRCX has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.21, LRCX is doing worse than 70.54% of the companies in the same industry.
A Quick Ratio of 1.60 indicates that LRCX should not have too much problems paying its short term obligations.
LRCX's Quick ratio of 1.60 is on the low side compared to the rest of the industry. LRCX is outperformed by 67.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.21 | ||
| Quick Ratio | 1.6 |
3. Growth
3.1 Past
LRCX 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, 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 25.66%.
Measured over the past years, LRCX shows a quite strong growth in Revenue. The Revenue has been growing by 12.91% on average per year.
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
The Earnings Per Share is expected to grow by 13.46% 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 10.31% on average per year.
EPS Next Y19.45%
EPS Next 2Y18.08%
EPS Next 3Y15.09%
EPS Next 5Y13.46%
Revenue Next Year16.75%
Revenue Next 2Y14.46%
Revenue Next 3Y11.68%
Revenue Next 5Y10.31%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 32.66, which means the current valuation is very expensive for LRCX.
Compared to the rest of the industry, the Price/Earnings ratio of LRCX indicates a somewhat cheap valuation: LRCX is cheaper than 69.64% of the companies listed in the same industry.
LRCX is valuated rather expensively when we compare the Price/Earnings ratio to 25.89, which is the current average of the S&P500 Index.
LRCX is valuated quite expensively with a Price/Forward Earnings ratio of 25.68.
Compared to the rest of the industry, the Price/Forward Earnings ratio of LRCX indicates a somewhat cheap valuation: LRCX is cheaper than 63.39% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 34.59, LRCX is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.66 | ||
| Fwd PE | 25.68 |
4.2 Price Multiples
LRCX's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. LRCX is cheaper than 64.29% of the companies in the same industry.
LRCX's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. LRCX is cheaper than 74.11% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.69 | ||
| EV/EBITDA | 27.86 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct 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 15.09% in the coming years.
PEG (NY)1.68
PEG (5Y)1.55
EPS Next 2Y18.08%
EPS Next 3Y15.09%
5. Dividend
5.1 Amount
LRCX has a yearly dividend return of 0.64%, which is pretty low.
Compared to an average industry Dividend Yield of 2.17, LRCX pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.36, LRCX's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
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 20.32% of its income as dividend. This is a 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 2Y18.08%
EPS Next 3Y15.09%
148.26
-5.06 (-3.3%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners89.15%
Inst Owner Change-0.29%
Ins Owners0.26%
Ins Owner Change-1.63%
Market Cap186.96B
Revenue(TTM)19.59B
Net Income(TTM)5.81B
Analysts80
Price Target160.7 (8.39%)
Short Float %2.58%
Short Ratio2.73
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
Yearly Dividend0.89
Dividend Growth(5Y)14.54%
DP20.32%
Div Incr Years10
Div Non Decr Years10
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.44%
Min EPS beat(2)1.09%
Max EPS beat(2)7.79%
EPS beat(4)4
Avg EPS beat(4)3%
Min EPS beat(4)1.09%
Max EPS beat(4)7.79%
EPS beat(8)8
Avg EPS beat(8)3.8%
EPS beat(12)12
Avg EPS beat(12)5.49%
EPS beat(16)14
Avg EPS beat(16)5.37%
Revenue beat(2)1
Avg Revenue beat(2)0.49%
Min Revenue beat(2)-0.24%
Max Revenue beat(2)1.22%
Revenue beat(4)1
Avg Revenue beat(4)0.03%
Min Revenue beat(4)-0.48%
Max Revenue beat(4)1.22%
Revenue beat(8)2
Avg Revenue beat(8)-0.07%
Revenue beat(12)5
Avg Revenue beat(12)0.08%
Revenue beat(16)7
Avg Revenue beat(16)-0.14%
PT rev (1m)35.43%
PT rev (3m)44.87%
EPS NQ rev (1m)12.64%
EPS NQ rev (3m)15.5%
EPS NY rev (1m)8.01%
EPS NY rev (3m)19.59%
Revenue NQ rev (1m)9%
Revenue NQ rev (3m)10.4%
Revenue NY rev (1m)6.1%
Revenue NY rev (3m)13.61%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.66 | ||
| Fwd PE | 25.68 | ||
| P/S | 9.54 | ||
| P/FCF | 33.69 | ||
| P/OCF | 29.29 | ||
| P/B | 18.34 | ||
| P/tB | 22.35 | ||
| EV/EBITDA | 27.86 |
EPS(TTM)4.54
EY3.06%
EPS(NY)5.77
Fwd EY3.89%
FCF(TTM)4.4
FCFY2.97%
OCF(TTM)5.06
OCFY3.41%
SpS15.54
BVpS8.08
TBVpS6.63
PEG (NY)1.68
PEG (5Y)1.55
Graham Number28.73
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 26.53% | ||
| ROE | 57.01% | ||
| ROCE | 42.56% | ||
| ROIC | 37.82% | ||
| ROICexc | 67.6% | ||
| ROICexgc | 86.11% | ||
| OM | 33% | ||
| PM (TTM) | 29.66% | ||
| GM | 49.31% | ||
| FCFM | 28.33% |
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%
ROICexgc growth 3Y7.04%
ROICexgc 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 Turnover0.89
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | 0.81 | ||
| Debt/EBITDA | 0.54 | ||
| Cap/Depr | 211.81% | ||
| Cap/Sales | 4.26% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 93.06% | ||
| Profit Quality | 95.52% | ||
| Current Ratio | 2.21 | ||
| Quick Ratio | 1.6 | ||
| Altman-Z | N/A |
F-Score8
WACC10.71%
ROIC/WACC3.53
Cap/Depr(3y)151.1%
Cap/Depr(5y)146.11%
Cap/Sales(3y)3.22%
Cap/Sales(5y)3.04%
Profit Quality(3y)105.3%
Profit Quality(5y)90.85%
High Growth Momentum
Growth
EPS 1Y (TTM)41.65%
EPS 3Y7.72%
EPS 5Y21.02%
EPS Q2Q%46.51%
EPS Next Y19.45%
EPS Next 2Y18.08%
EPS Next 3Y15.09%
EPS Next 5Y13.46%
Revenue 1Y (TTM)25.66%
Revenue growth 3Y2.29%
Revenue growth 5Y12.91%
Sales Q2Q%27.74%
Revenue Next Year16.75%
Revenue Next 2Y14.46%
Revenue Next 3Y11.68%
Revenue Next 5Y10.31%
EBIT growth 1Y41.9%
EBIT growth 3Y3.12%
EBIT growth 5Y17.15%
EBIT Next Year16.89%
EBIT Next 3Y17.16%
EBIT Next 5Y10.27%
FCF growth 1Y23.28%
FCF growth 3Y28.47%
FCF growth 5Y23%
OCF growth 1Y29.21%
OCF growth 3Y25.82%
OCF growth 5Y23.76%
LAM RESEARCH CORP / LRCX FAQ
What is the fundamental rating for LRCX stock?
ChartMill assigns a fundamental rating of 7 / 10 to LRCX.
Can you provide the valuation status for LAM RESEARCH CORP?
ChartMill assigns a valuation rating of 5 / 10 to LAM RESEARCH CORP (LRCX). This can be considered as Fairly Valued.
Can you provide the profitability details for LAM RESEARCH CORP?
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 32.66 and the Price/Book (PB) ratio is 18.34.
Can you provide the financial health for LRCX stock?
The financial health rating of LAM RESEARCH CORP (LRCX) is 6 / 10.