LAM RESEARCH CORP (LRCX) Stock Fundamental Analysis
NASDAQ:LRCX - Nasdaq - US5128073062 - Common Stock - Currency: USD
Overall LRCX gets a fundamental rating of 7 out of 10. We evaluated LRCX against 110 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.
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 25.10%. This is amongst the best in the industry. LRCX outperforms 96.36% of its industry peers.
Looking at the Return On Equity, with a value of 54.33%, LRCX belongs to the top of the industry, outperforming 95.45% of the companies in the same industry.
LRCX has a Return On Invested Capital of 35.49%. This is amongst the best in the industry. LRCX outperforms 98.18% 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 10.64%.
The 3 year average ROIC (31.47%) for LRCX is below the current ROIC(35.49%), indicating increased profibility in the last year.
| 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
LRCX has a Profit Margin of 29.06%. This is amongst the best in the industry. LRCX outperforms 90.91% of its industry peers.
LRCX's Profit Margin has improved in the last couple of years.
The Operating Margin of LRCX (32.01%) is better than 91.82% of its industry peers.
In the last couple of years the Operating Margin of LRCX has grown nicely.
Looking at the Gross Margin, with a value of 48.70%, LRCX is in line with its industry, outperforming 57.27% of the companies in the same industry.
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), LRCX is creating value.
LRCX has less shares outstanding than it did 1 year ago.
LRCX has less shares outstanding than it did 5 years ago.
The debt/assets ratio for LRCX has been reduced compared to a year ago.
2.2 Solvency
LRCX has a debt to FCF ratio of 0.83. This is a very positive value and a sign of high solvency as it would only need 0.83 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.83, LRCX is in the better half of the industry, outperforming 75.45% of the companies in the same industry.
LRCX has a Debt/Equity ratio of 0.38. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.38, LRCX is doing worse than 67.27% of the companies in the same industry.
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/WACC3.14
WACC11.31%
2.3 Liquidity
A Current Ratio of 2.21 indicates that LRCX has no problem at all paying its short term obligations.
LRCX has a Current ratio of 2.21. This is in the lower half of the industry: LRCX underperforms 67.27% of its industry peers.
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.
With a Quick ratio value of 1.55, LRCX is not doing good in the industry: 69.09% of the companies in the same industry are doing better.
| 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.
LRCX shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 21.02% yearly.
The Revenue has grown by 23.68% in the past year. This is a very strong growth!
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)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
Based on estimates for the next years, LRCX will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.22% on average per year.
Based on estimates for the next years, LRCX will show a small growth in Revenue. The Revenue will grow by 7.46% on average per year.
EPS Next Y-0.11%
EPS Next 2Y8.73%
EPS Next 3Y8.96%
EPS Next 5Y10.22%
Revenue Next Year2.76%
Revenue Next 2Y7.39%
Revenue Next 3Y6.65%
Revenue Next 5Y7.46%
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 24.58 indicates a rather expensive valuation of LRCX.
Based on the Price/Earnings ratio, LRCX is valued a bit cheaper than 72.73% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.48, LRCX is valued at the same level.
Based on the Price/Forward Earnings ratio of 24.60, the valuation of LRCX can be described as rather expensive.
LRCX's Price/Forward Earnings is on the same level as the industry average.
LRCX's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 34.04.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.58 | ||
| Fwd PE | 24.6 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, LRCX is valued a bit cheaper than 67.27% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of LRCX indicates a somewhat cheap valuation: LRCX is cheaper than 79.09% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.1 | ||
| EV/EBITDA | 20.4 |
4.3 Compensation for Growth
LRCX has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.17
EPS Next 2Y8.73%
EPS Next 3Y8.96%
5. Dividend
5.1 Amount
With a yearly dividend of 0.93%, LRCX is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.46, LRCX pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.39, LRCX's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.93% |
5.2 History
On average, the dividend of LRCX grows each year by 14.54%, which is quite nice.
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
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 slower than its dividend. This means the dividend growth is not sustainable.
DP21.45%
EPS Next 2Y8.73%
EPS Next 3Y8.96%
101.75
+2.6 (+2.62%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners88.42%
Inst Owner Change0.43%
Ins Owners0.26%
Ins Owner Change3.4%
Market Cap130.15B
Analysts80.51
Price Target110.93 (9.02%)
Short Float %2.37%
Short Ratio3.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.93% |
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)16.74%
PT rev (3m)21.37%
EPS NQ rev (1m)15.57%
EPS NQ rev (3m)23.37%
EPS NY rev (1m)0%
EPS NY rev (3m)5.74%
Revenue NQ rev (1m)9.76%
Revenue NQ rev (3m)13.34%
Revenue NY rev (1m)-0.05%
Revenue NY rev (3m)0.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.58 | ||
| Fwd PE | 24.6 | ||
| P/S | 7.06 | ||
| P/FCF | 24.1 | ||
| P/OCF | 21.13 | ||
| P/B | 13.2 | ||
| P/tB | 16.16 | ||
| EV/EBITDA | 20.4 |
EPS(TTM)4.14
EY4.07%
EPS(NY)4.14
Fwd EY4.06%
FCF(TTM)4.22
FCFY4.15%
OCF(TTM)4.82
OCFY4.73%
SpS14.41
BVpS7.71
TBVpS6.3
PEG (NY)N/A
PEG (5Y)1.17
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
WACC11.31%
ROIC/WACC3.14
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 Y-0.11%
EPS Next 2Y8.73%
EPS Next 3Y8.96%
EPS Next 5Y10.22%
Revenue 1Y (TTM)23.68%
Revenue growth 3Y2.29%
Revenue growth 5Y12.91%
Sales Q2Q%33.58%
Revenue Next Year2.76%
Revenue Next 2Y7.39%
Revenue Next 3Y6.65%
Revenue Next 5Y7.46%
EBIT growth 1Y36.42%
EBIT growth 3Y3.12%
EBIT growth 5Y17.15%
EBIT Next Year13.81%
EBIT Next 3Y14.01%
EBIT Next 5Y9.99%
FCF growth 1Y26.9%
FCF growth 3Y28.36%
FCF growth 5Y22.94%
OCF growth 1Y32.4%
OCF growth 3Y25.72%
OCF growth 5Y23.7%