LAM RESEARCH CORP (LRCX) Stock Fundamental Analysis
USA - NASDAQ:LRCX - US5128073062 - Common Stock
159.35 USD
-2.84 (-1.75%)
159.98 USD
+0.63 (+0.4%)
Overall LRCX gets a fundamental rating of 7 out of 10. We evaluated LRCX against 112 industry peers in the Semiconductors & Semiconductor Equipment industry. While LRCX belongs to the best of the industry regarding profitability, 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.
In the past year LRCX had a positive cash flow from operations.
In the past 5 years LRCX has always been profitable.
LRCX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
LRCX has a Return On Assets of 26.53%. This is amongst the best in the industry. LRCX outperforms 97.32% of its industry peers.
LRCX has a Return On Equity of 57.01%. This is amongst the best in the industry. LRCX outperforms 96.43% of its industry peers.
LRCX has a Return On Invested Capital of 37.82%. This is amongst the best in the industry. LRCX outperforms 98.21% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for LRCX is significantly above the industry average of 11.07%.
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
The Profit Margin of LRCX (29.66%) is better than 91.07% 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 33.00%, LRCX belongs to the top of the industry, outperforming 91.96% of the companies in the same industry.
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 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.
The debt/assets ratio for LRCX has been reduced compared to a year ago.
2.2 Solvency
The Debt to FCF ratio of LRCX is 0.81, which is an excellent value as it means it would take LRCX, only 0.81 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of LRCX (0.81) is better than 76.79% of its industry peers.
A Debt/Equity ratio of 0.37 indicates that LRCX is not too dependend on debt financing.
LRCX has a worse Debt to Equity ratio (0.37) than 65.18% 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 | 0.37 | ||
| Debt/FCF | 0.81 | ||
| Altman-Z | N/A |
ROIC/WACC3.22
WACC11.75%
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.
The Current ratio of LRCX (2.21) is worse than 69.64% 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 Quick ratio of 1.60. This is in the lower half of the industry: LRCX underperforms 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.
Looking at the last year, LRCX shows a very strong growth in Revenue. The Revenue has grown by 25.66%.
LRCX shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 12.91% yearly.
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 16.67% on average over the next years. This is quite good.
LRCX is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.28% yearly.
EPS Next Y11.82%
EPS Next 2Y14.65%
EPS Next 3Y14.42%
EPS Next 5Y16.67%
Revenue Next Year10.38%
Revenue Next 2Y10.67%
Revenue Next 3Y9.97%
Revenue Next 5Y8.28%
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
LRCX is valuated quite expensively with a Price/Earnings ratio of 35.10.
70.54% of the companies in the same industry are more expensive than LRCX, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 25.83, LRCX is valued a bit more expensive.
LRCX is valuated quite expensively with a Price/Forward Earnings ratio of 29.28.
Based on the Price/Forward Earnings ratio, LRCX is valued a bit cheaper than the industry average as 60.71% 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 32.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.1 | ||
| Fwd PE | 29.28 |
4.2 Price Multiples
63.39% 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 75.89% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 36.21 | ||
| EV/EBITDA | 29.49 |
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.
The excellent profitability rating of LRCX may justify a higher PE ratio.
LRCX's earnings are expected to grow with 14.42% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.97
PEG (5Y)1.67
EPS Next 2Y14.65%
EPS Next 3Y14.42%
5. Dividend
5.1 Amount
LRCX has a yearly dividend return of 0.65%, which is pretty low.
LRCX's Dividend Yield is a higher than the industry average which is at 2.15.
With a Dividend Yield of 0.65, LRCX pays less dividend than the S&P500 average, which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.65% |
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 around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP20.32%
EPS Next 2Y14.65%
EPS Next 3Y14.42%
159.35
-2.84 (-1.75%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners89.15%
Inst Owner Change0.25%
Ins Owners0.26%
Ins Owner Change-1.58%
Market Cap200.95B
Revenue(TTM)19.59B
Net Income(TTM)5.81B
Analysts80
Price Target160.7 (0.85%)
Short Float %2.58%
Short Ratio2.73
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.65% |
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)42.88%
PT rev (3m)61.41%
EPS NQ rev (1m)11.81%
EPS NQ rev (3m)17.53%
EPS NY rev (1m)1.11%
EPS NY rev (3m)11.94%
Revenue NQ rev (1m)8.08%
Revenue NQ rev (3m)11.76%
Revenue NY rev (1m)0.31%
Revenue NY rev (3m)7.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.1 | ||
| Fwd PE | 29.28 | ||
| P/S | 10.26 | ||
| P/FCF | 36.21 | ||
| P/OCF | 31.48 | ||
| P/B | 19.71 | ||
| P/tB | 24.02 | ||
| EV/EBITDA | 29.49 |
EPS(TTM)4.54
EY2.85%
EPS(NY)5.44
Fwd EY3.41%
FCF(TTM)4.4
FCFY2.76%
OCF(TTM)5.06
OCFY3.18%
SpS15.54
BVpS8.08
TBVpS6.63
PEG (NY)2.97
PEG (5Y)1.67
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
WACC11.75%
ROIC/WACC3.22
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 Y11.82%
EPS Next 2Y14.65%
EPS Next 3Y14.42%
EPS Next 5Y16.67%
Revenue 1Y (TTM)25.66%
Revenue growth 3Y2.29%
Revenue growth 5Y12.91%
Sales Q2Q%27.74%
Revenue Next Year10.38%
Revenue Next 2Y10.67%
Revenue Next 3Y9.97%
Revenue Next 5Y8.28%
EBIT growth 1Y41.9%
EBIT growth 3Y3.12%
EBIT growth 5Y17.15%
EBIT Next Year16.89%
EBIT Next 3Y13.89%
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 4 / 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 35.1 and the Price/Book (PB) ratio is 19.71.
Can you provide the financial health for LRCX stock?
The financial health rating of LAM RESEARCH CORP (LRCX) is 6 / 10.