LAM RESEARCH CORP (LRCX) Stock Fundamental Analysis
NASDAQ:LRCX - Nasdaq - US5128073062 - Common Stock - Currency: USD
LRCX gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 108 industry peers in the Semiconductors & Semiconductor Equipment industry. LRCX has an excellent profitability rating, 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 could make LRCX a good candidate 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.
Each year in the past 5 years LRCX has been profitable.
Each year in the past 5 years LRCX had a positive operating cash flow.
1.2 Ratios
LRCX has a better Return On Assets (21.64%) than 96.30% of its industry peers.
LRCX has a Return On Equity of 48.75%. This is amongst the best in the industry. LRCX outperforms 95.37% of its industry peers.
With an excellent Return On Invested Capital value of 29.27%, LRCX belongs to the best of the industry, outperforming 97.22% 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 11.67%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.64% | ||
| ROE | 48.75% | ||
| ROIC | 29.27% |
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
With an excellent Profit Margin value of 26.49%, LRCX belongs to the best of the industry, outperforming 87.96% of the companies in the same industry.
LRCX's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 29.72%, LRCX belongs to the best of the industry, outperforming 91.67% 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 of 47.73%. This is comparable to the rest of the industry: LRCX outperforms 59.26% of its industry peers.
LRCX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.72% | ||
| PM (TTM) | 26.49% | ||
| GM | 47.73% |
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), LRCX is creating value.
LRCX has more shares outstanding than it did 1 year ago.
LRCX has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, LRCX has an improved debt to assets ratio.
2.2 Solvency
LRCX has an Altman-Z score of 10.20. This indicates that LRCX is financially healthy and has little risk of bankruptcy at the moment.
LRCX has a Altman-Z score of 10.20. This is in the better half of the industry: LRCX outperforms 79.63% of its industry peers.
The Debt to FCF ratio of LRCX is 1.23, which is an excellent value as it means it would take LRCX, only 1.23 years of fcf income to pay off all of its debts.
LRCX has a Debt to FCF ratio of 1.23. This is in the better half of the industry: LRCX outperforms 74.07% of its industry peers.
LRCX has a Debt/Equity ratio of 0.51. This is a neutral value indicating LRCX is somewhat dependend on debt financing.
LRCX's Debt to Equity ratio of 0.51 is on the low side compared to the rest of the industry. LRCX is outperformed by 75.93% 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 | 0.51 | ||
| Debt/FCF | 1.23 | ||
| Altman-Z | 10.2 |
ROIC/WACC2.48
WACC11.8%
2.3 Liquidity
LRCX has a Current Ratio of 2.54. This indicates that LRCX is financially healthy and has no problem in meeting its short term obligations.
LRCX has a Current ratio (2.54) which is comparable to the rest of the industry.
A Quick Ratio of 1.73 indicates that LRCX should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.73, LRCX is doing worse than 64.81% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.54 | ||
| Quick Ratio | 1.73 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 23.01% over the past year.
Measured over the past years, LRCX shows a quite strong growth in Earnings Per Share. The EPS has been growing by 15.80% on average per year.
LRCX shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.21%.
The Revenue has been growing by 9.08% on average over the past years. This is quite good.
EPS 1Y (TTM)23.01%
EPS 3Y3.56%
EPS 5Y15.8%
EPS Q2Q%21.01%
Revenue 1Y (TTM)13.21%
Revenue growth 3Y0.63%
Revenue growth 5Y9.08%
Sales Q2Q%16.44%
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 13.52% yearly.
Based on estimates for the next years, LRCX will show a quite strong growth in Revenue. The Revenue will grow by 10.47% on average per year.
EPS Next Y26.64%
EPS Next 2Y14.4%
EPS Next 3Y16.9%
EPS Next 5Y13.52%
Revenue Next Year18.75%
Revenue Next 2Y11.39%
Revenue Next 3Y12.14%
Revenue Next 5Y10.47%
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.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 25.60, which means the current valuation is very expensive for LRCX.
LRCX's Price/Earnings ratio is a bit cheaper when compared to the industry. LRCX is cheaper than 74.07% of the companies in the same industry.
LRCX's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 29.63.
The Price/Forward Earnings ratio is 21.69, which indicates a rather expensive current valuation of LRCX.
Based on the Price/Forward Earnings ratio, LRCX is valued a bit cheaper than the industry average as 75.93% of the companies are valued more expensively.
LRCX is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.6 | ||
| Fwd PE | 21.69 |
4.2 Price Multiples
68.52% of the companies in the same industry are more expensive than LRCX, based on the Enterprise Value to EBITDA ratio.
LRCX's Price/Free Cash Flow ratio is rather cheap when compared to the industry. LRCX is cheaper than 82.41% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.24 | ||
| EV/EBITDA | 21.91 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
LRCX has an outstanding profitability rating, which may justify a higher PE ratio.
LRCX's earnings are expected to grow with 16.90% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.96
PEG (5Y)1.62
EPS Next 2Y14.4%
EPS Next 3Y16.9%
5. Dividend
5.1 Amount
LRCX has a Yearly Dividend Yield of 1.10%.
LRCX's Dividend Yield is rather good when compared to the industry average which is at 2.34. LRCX pays more dividend than 82.41% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, LRCX's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.1% |
5.2 History
The dividend of LRCX decreases each year by -20.64%.
LRCX has paid a dividend for at least 10 years, which is a reliable track record.
LRCX has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-20.64%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
LRCX pays out 25.22% of its income as dividend. This is a sustainable payout ratio.
DP25.22%
EPS Next 2Y14.4%
EPS Next 3Y16.9%
86.02
-3 (-3.37%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners8.9%
Inst Owner Change788.16%
Ins Owners0.02%
Ins Owner Change4.23%
Market Cap110.42B
Analysts78.92
Price Target92.05 (7.01%)
Short Float %2.63%
Short Ratio2.85
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.1% |
Yearly Dividend1.42
Dividend Growth(5Y)-20.64%
DP25.22%
Div Incr Years10
Div Non Decr Years10
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.24%
Min EPS beat(2)1.69%
Max EPS beat(2)4.79%
EPS beat(4)4
Avg EPS beat(4)4.09%
Min EPS beat(4)1.69%
Max EPS beat(4)5.32%
EPS beat(8)8
Avg EPS beat(8)6.27%
EPS beat(12)11
Avg EPS beat(12)6.45%
EPS beat(16)13
Avg EPS beat(16)5.72%
Revenue beat(2)1
Avg Revenue beat(2)0.2%
Min Revenue beat(2)-0.48%
Max Revenue beat(2)0.87%
Revenue beat(4)1
Avg Revenue beat(4)-0.11%
Min Revenue beat(4)-0.71%
Max Revenue beat(4)0.87%
Revenue beat(8)3
Avg Revenue beat(8)-0.19%
Revenue beat(12)6
Avg Revenue beat(12)0.28%
Revenue beat(16)8
Avg Revenue beat(16)-0.11%
PT rev (1m)-3.54%
PT rev (3m)-7.92%
EPS NQ rev (1m)13.47%
EPS NQ rev (3m)-89.22%
EPS NY rev (1m)4.85%
EPS NY rev (3m)4.53%
Revenue NQ rev (1m)6.78%
Revenue NQ rev (3m)3.69%
Revenue NY rev (1m)1.8%
Revenue NY rev (3m)1.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.6 | ||
| Fwd PE | 21.69 | ||
| P/S | 6.81 | ||
| P/FCF | 27.24 | ||
| P/OCF | 24.23 | ||
| P/B | 12.54 | ||
| P/tB | 15.67 | ||
| EV/EBITDA | 21.91 |
EPS(TTM)3.36
EY3.91%
EPS(NY)3.97
Fwd EY4.61%
FCF(TTM)3.16
FCFY3.67%
OCF(TTM)3.55
OCFY4.13%
SpS12.63
BVpS6.86
TBVpS5.49
PEG (NY)0.96
PEG (5Y)1.62
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.64% | ||
| ROE | 48.75% | ||
| ROCE | 33.24% | ||
| ROIC | 29.27% | ||
| ROICexc | 48.06% | ||
| ROICexgc | 60.04% | ||
| OM | 29.72% | ||
| PM (TTM) | 26.49% | ||
| GM | 47.73% | ||
| FCFM | 25.01% |
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-Score8
Asset Turnover0.82
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | 1.23 | ||
| Debt/EBITDA | 0.86 | ||
| Cap/Depr | 136.49% | ||
| Cap/Sales | 3.11% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 87.89% | ||
| Profit Quality | 94.43% | ||
| Current Ratio | 2.54 | ||
| Quick Ratio | 1.73 | ||
| Altman-Z | 10.2 |
F-Score8
WACC11.8%
ROIC/WACC2.48
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)23.01%
EPS 3Y3.56%
EPS 5Y15.8%
EPS Q2Q%21.01%
EPS Next Y26.64%
EPS Next 2Y14.4%
EPS Next 3Y16.9%
EPS Next 5Y13.52%
Revenue 1Y (TTM)13.21%
Revenue growth 3Y0.63%
Revenue growth 5Y9.08%
Sales Q2Q%16.44%
Revenue Next Year18.75%
Revenue Next 2Y11.39%
Revenue Next 3Y12.14%
Revenue Next 5Y10.47%
EBIT growth 1Y19.7%
EBIT growth 3Y-1.18%
EBIT growth 5Y11.88%
EBIT Next Year31.74%
EBIT Next 3Y18.05%
EBIT Next 5Y12.86%
FCF growth 1Y37.12%
FCF growth 3Y9.52%
FCF growth 5Y8.18%
OCF growth 1Y29.06%
OCF growth 3Y9.04%
OCF growth 5Y7.93%