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 110 industry peers in the Semiconductors & Semiconductor Equipment industry. LRCX scores excellent points on both the profitability and health parts. This is a solid base for a good stock. LRCX is not priced too expensively while it is growing strongly. Keep and eye on this one! With these ratings, LRCX could be worth investigating further for growth and quality 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.
In the past 5 years LRCX always reported a positive cash flow from operatings.
1.2 Ratios
LRCX has a Return On Assets of 23.33%. This is amongst the best in the industry. LRCX outperforms 95.45% of its industry peers.
The Return On Equity of LRCX (48.98%) is better than 95.45% of its industry peers.
LRCX has a Return On Invested Capital of 32.17%. This is amongst the best in the industry. LRCX outperforms 98.18% of its industry peers.
The Average Return On Invested Capital over the past 3 years for LRCX is significantly above the industry average of 10.57%.
The last Return On Invested Capital (32.17%) for LRCX is above the 3 year average (31.96%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.33% | ||
| ROE | 48.98% | ||
| ROIC | 32.17% |
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 27.19%, LRCX belongs to the best of the industry, outperforming 88.18% of the companies in the same industry.
LRCX's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 30.88%, LRCX belongs to the top of the industry, outperforming 90.91% 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 (48.06%) which is in line with its industry peers.
LRCX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.88% | ||
| PM (TTM) | 27.19% | ||
| GM | 48.06% |
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
LRCX has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, LRCX has more shares outstanding
Compared to 5 years ago, LRCX has more shares outstanding
Compared to 1 year ago, LRCX has an improved debt to assets ratio.
2.2 Solvency
LRCX has an Altman-Z score of 10.87. This indicates that LRCX is financially healthy and has little risk of bankruptcy at the moment.
LRCX has a better Altman-Z score (10.87) than 83.64% of its industry peers.
LRCX has a debt to FCF ratio of 1.18. This is a very positive value and a sign of high solvency as it would only need 1.18 years to pay back of all of its debts.
LRCX has a better Debt to FCF ratio (1.18) than 74.55% of its industry peers.
A Debt/Equity ratio of 0.39 indicates that LRCX is not too dependend on debt financing.
LRCX's Debt to Equity ratio of 0.39 is on the low side compared to the rest of the industry. LRCX is outperformed by 66.36% 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 | 0.39 | ||
| Debt/FCF | 1.18 | ||
| Altman-Z | 10.87 |
ROIC/WACC3.24
WACC9.93%
2.3 Liquidity
LRCX has a Current Ratio of 2.45. 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 2.45, LRCX is doing worse than 64.55% of the companies in the same industry.
A Quick Ratio of 1.64 indicates that LRCX should not have too much problems paying its short term obligations.
LRCX has a worse Quick ratio (1.64) than 68.18% of its industry peers.
LRCX does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.45 | ||
| Quick Ratio | 1.64 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 28.78% 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 a strong growth in Revenue. In the last year, the Revenue has grown by 20.33%.
LRCX shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.08% yearly.
EPS 1Y (TTM)28.78%
EPS 3Y3.56%
EPS 5Y15.8%
EPS Q2Q%33.5%
Revenue 1Y (TTM)20.33%
Revenue growth 3Y0.63%
Revenue growth 5Y9.08%
Sales Q2Q%24.43%
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 14.96% on average per year.
LRCX is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.27% yearly.
EPS Next Y35.07%
EPS Next 2Y16.39%
EPS Next 3Y16.49%
EPS Next 5Y14.96%
Revenue Next Year22.8%
Revenue Next 2Y12.13%
Revenue Next 3Y11.84%
Revenue Next 5Y10.27%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 24.73, the valuation of LRCX can be described as rather expensive.
LRCX's Price/Earnings ratio is a bit cheaper when compared to the industry. LRCX is cheaper than 68.18% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.31. LRCX is around the same levels.
Based on the Price/Forward Earnings ratio of 21.81, the valuation of LRCX can be described as rather expensive.
Based on the Price/Forward Earnings ratio, LRCX is valued a bit cheaper than 60.91% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.13. LRCX is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.73 | ||
| Fwd PE | 21.81 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, LRCX is valued a bit cheaper than 66.36% 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 71.82% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.18 | ||
| EV/EBITDA | 20.52 |
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.
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 16.49% in the coming years.
PEG (NY)0.71
PEG (5Y)1.56
EPS Next 2Y16.39%
EPS Next 3Y16.49%
5. Dividend
5.1 Amount
LRCX has a Yearly Dividend Yield of 1.00%.
Compared to an average industry Dividend Yield of 2.61, LRCX pays a better dividend. On top of this LRCX pays more dividend than 80.91% of the companies listed in the same industry.
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 | 1% |
5.2 History
The dividend of LRCX decreases each year by -20.64%.
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)-20.64%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
LRCX pays out 23.95% of its income as dividend. This is a sustainable payout ratio.
DP23.95%
EPS Next 2Y16.39%
EPS Next 3Y16.49%
89.52
-2.14 (-2.33%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners87.26%
Inst Owner Change3.53%
Ins Owners0.26%
Ins Owner Change7.7%
Market Cap114.51B
Analysts81.08
Price Target92.66 (3.51%)
Short Float %2.16%
Short Ratio2.23
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1% |
Yearly Dividend1.42
Dividend Growth(5Y)-20.64%
DP23.95%
Div Incr Years10
Div Non Decr Years10
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.55%
Min EPS beat(2)1.42%
Max EPS beat(2)1.69%
EPS beat(4)4
Avg EPS beat(4)3.3%
Min EPS beat(4)1.42%
Max EPS beat(4)5.32%
EPS beat(8)8
Avg EPS beat(8)5.85%
EPS beat(12)12
Avg EPS beat(12)6.86%
EPS beat(16)13
Avg EPS beat(16)5.12%
Revenue beat(2)0
Avg Revenue beat(2)-0.44%
Min Revenue beat(2)-0.48%
Max Revenue beat(2)-0.4%
Revenue beat(4)1
Avg Revenue beat(4)-0.18%
Min Revenue beat(4)-0.71%
Max Revenue beat(4)0.87%
Revenue beat(8)3
Avg Revenue beat(8)-0.13%
Revenue beat(12)6
Avg Revenue beat(12)0.77%
Revenue beat(16)7
Avg Revenue beat(16)-0.26%
PT rev (1m)-0.79%
PT rev (3m)-4.38%
EPS NQ rev (1m)0%
EPS NQ rev (3m)22.9%
EPS NY rev (1m)6.85%
EPS NY rev (3m)6.62%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)8.37%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.48%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.73 | ||
| Fwd PE | 21.81 | ||
| P/S | 6.68 | ||
| P/FCF | 30.18 | ||
| P/OCF | 25.55 | ||
| P/B | 12.04 | ||
| P/tB | 14.84 | ||
| EV/EBITDA | 20.52 |
EPS(TTM)3.62
EY4.04%
EPS(NY)4.1
Fwd EY4.59%
FCF(TTM)2.97
FCFY3.31%
OCF(TTM)3.5
OCFY3.91%
SpS13.4
BVpS7.44
TBVpS6.03
PEG (NY)0.71
PEG (5Y)1.56
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.33% | ||
| ROE | 48.98% | ||
| ROCE | 36.54% | ||
| ROIC | 32.17% | ||
| ROICexc | 51.6% | ||
| ROICexgc | 64.4% | ||
| OM | 30.88% | ||
| PM (TTM) | 27.19% | ||
| GM | 48.06% | ||
| FCFM | 22.14% |
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-Score7
Asset Turnover0.86
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.39 | ||
| Debt/FCF | 1.18 | ||
| Debt/EBITDA | 0.66 | ||
| Cap/Depr | 182.82% | ||
| Cap/Sales | 4.01% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 79.08% | ||
| Profit Quality | 81.44% | ||
| Current Ratio | 2.45 | ||
| Quick Ratio | 1.64 | ||
| Altman-Z | 10.87 |
F-Score7
WACC9.93%
ROIC/WACC3.24
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)28.78%
EPS 3Y3.56%
EPS 5Y15.8%
EPS Q2Q%33.5%
EPS Next Y35.07%
EPS Next 2Y16.39%
EPS Next 3Y16.49%
EPS Next 5Y14.96%
Revenue 1Y (TTM)20.33%
Revenue growth 3Y0.63%
Revenue growth 5Y9.08%
Sales Q2Q%24.43%
Revenue Next Year22.8%
Revenue Next 2Y12.13%
Revenue Next 3Y11.84%
Revenue Next 5Y10.27%
EBIT growth 1Y30.25%
EBIT growth 3Y-1.18%
EBIT growth 5Y11.88%
EBIT Next Year39.66%
EBIT Next 3Y16.98%
EBIT Next 5Y14%
FCF growth 1Y-3.99%
FCF growth 3Y9.52%
FCF growth 5Y8.18%
OCF growth 1Y-0.41%
OCF growth 3Y9.04%
OCF growth 5Y7.93%