LAM RESEARCH CORP (LRCX) Stock Fundamental Analysis
USA - NASDAQ:LRCX - US5128073062 - Common Stock
116.96 USD
+1.38 (+1.19%)
117 USD
+0.04 (+0.03%)
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. While LRCX has a great profitability rating, there are some minor concerns on its financial health. LRCX has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year LRCX was profitable.
LRCX had a positive operating cash flow in the past year.
In the past 5 years LRCX has always been profitable.
In the past 5 years LRCX always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 25.10%, LRCX belongs to the top of the industry, outperforming 96.43% of the companies in the same industry.
Looking at the Return On Equity, with a value of 54.33%, LRCX belongs to the top of the industry, outperforming 95.54% of the companies in the same industry.
The Return On Invested Capital of LRCX (35.49%) is better than 98.21% of its industry peers.
The Average Return On Invested Capital over the past 3 years for LRCX is significantly above the industry average of 10.87%.
The last Return On Invested Capital (35.49%) for LRCX is above the 3 year average (31.47%), which is a sign of increasing profitability.
| 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
The Profit Margin of LRCX (29.06%) is better than 89.29% of its industry peers.
In the last couple of years the Profit Margin of LRCX has grown nicely.
Looking at the Operating Margin, with a value of 32.01%, LRCX belongs to the top of the industry, outperforming 91.96% of the companies in the same industry.
In the last couple of years the Operating Margin of LRCX has grown nicely.
LRCX's Gross Margin of 48.70% is fine compared to the rest of the industry. LRCX outperforms 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 | 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
LRCX has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
LRCX has less shares outstanding than it did 1 year ago.
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
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.
The Debt to FCF ratio of LRCX (0.83) is better than 76.79% of its industry peers.
A Debt/Equity ratio of 0.38 indicates that LRCX is not too dependend on debt financing.
The Debt to Equity ratio of LRCX (0.38) is worse than 66.96% 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/WACC3.13
WACC11.32%
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.
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.
LRCX has a Quick Ratio of 1.55. 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 Quick ratio of 1.55. This is in the lower half of the industry: LRCX underperforms 69.64% 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.
The Earnings Per Share has been growing by 21.02% on average over the past years. This is a very strong growth
The Revenue has grown by 23.68% in the past year. This is a very strong growth!
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)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.
LRCX is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.88% yearly.
EPS Next Y10.07%
EPS Next 2Y12.01%
EPS Next 3Y12.4%
EPS Next 5Y16.67%
Revenue Next Year9.5%
Revenue Next 2Y9.47%
Revenue Next 3Y9%
Revenue Next 5Y7.88%
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.
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
Based on the Price/Earnings ratio of 28.25, the valuation of LRCX can be described as expensive.
Based on the Price/Earnings ratio, LRCX is valued a bit cheaper than the industry average as 73.21% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of LRCX to the average of the S&P500 Index (27.30), we can say LRCX is valued inline with the index average.
A Price/Forward Earnings ratio of 25.67 indicates a quite expensive valuation of LRCX.
LRCX's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. LRCX is cheaper than 62.50% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.73. LRCX is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.25 | ||
| Fwd PE | 25.67 |
4.2 Price Multiples
66.96% of the companies in the same industry are more expensive than LRCX, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, LRCX is valued a bit cheaper than the industry average as 78.57% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.41 | ||
| EV/EBITDA | 23.24 |
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.
LRCX has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as LRCX's earnings are expected to grow with 12.40% in the coming years.
PEG (NY)2.8
PEG (5Y)1.34
EPS Next 2Y12.01%
EPS Next 3Y12.4%
5. Dividend
5.1 Amount
With a yearly dividend of 0.90%, LRCX is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.31, LRCX pays a better dividend. On top of this LRCX pays more dividend than 80.36% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, LRCX's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.9% |
5.2 History
On average, the dividend of LRCX grows each year by 14.54%, which is quite nice.
LRCX has paid a dividend for at least 10 years, which is 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
21.45% of the earnings are spent on dividend by LRCX. This is a low number and sustainable payout ratio.
LRCX's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP21.45%
EPS Next 2Y12.01%
EPS Next 3Y12.4%
116.96
+1.38 (+1.19%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners88.42%
Inst Owner Change0.61%
Ins Owners0.26%
Ins Owner Change-0.4%
Market Cap148.03B
Analysts80
Price Target112.47 (-3.84%)
Short Float %2.71%
Short Ratio3.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.9% |
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)1.39%
PT rev (3m)21.38%
EPS NQ rev (1m)3.45%
EPS NQ rev (3m)23.7%
EPS NY rev (1m)10.19%
EPS NY rev (3m)11.02%
Revenue NQ rev (1m)1.24%
Revenue NQ rev (3m)13.19%
Revenue NY rev (1m)6.56%
Revenue NY rev (3m)6.98%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.25 | ||
| Fwd PE | 25.67 | ||
| P/S | 8.03 | ||
| P/FCF | 27.41 | ||
| P/OCF | 24.03 | ||
| P/B | 15.01 | ||
| P/tB | 18.38 | ||
| EV/EBITDA | 23.24 |
EPS(TTM)4.14
EY3.54%
EPS(NY)4.56
Fwd EY3.9%
FCF(TTM)4.27
FCFY3.65%
OCF(TTM)4.87
OCFY4.16%
SpS14.57
BVpS7.79
TBVpS6.36
PEG (NY)2.8
PEG (5Y)1.34
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
WACC11.32%
ROIC/WACC3.13
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 Y10.07%
EPS Next 2Y12.01%
EPS Next 3Y12.4%
EPS Next 5Y16.67%
Revenue 1Y (TTM)23.68%
Revenue growth 3Y2.29%
Revenue growth 5Y12.91%
Sales Q2Q%33.58%
Revenue Next Year9.5%
Revenue Next 2Y9.47%
Revenue Next 3Y9%
Revenue Next 5Y7.88%
EBIT growth 1Y36.42%
EBIT growth 3Y3.12%
EBIT growth 5Y17.15%
EBIT Next Year13.81%
EBIT Next 3Y12.52%
EBIT Next 5Y9.68%
FCF growth 1Y26.9%
FCF growth 3Y28.36%
FCF growth 5Y22.94%
OCF growth 1Y32.4%
OCF growth 3Y25.72%
OCF growth 5Y23.7%