LAM RESEARCH CORP (LRCX) Stock Fundamental Analysis
NASDAQ:LRCX - Nasdaq - US5128073062 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to LRCX. LRCX was compared to 110 industry peers in the Semiconductors & Semiconductor Equipment industry. Both the health and profitability get an excellent rating, making LRCX a very profitable company, without any liquidiy or solvency issues. LRCX is not priced too expensively while it is growing strongly. Keep and eye on this one! These ratings would make LRCX suitable for growth and quality investing!
1. Profitability
1.1 Basic Checks
LRCX had positive earnings in the past year.
LRCX had a positive operating cash flow in the past year.
LRCX had positive earnings in each of the past 5 years.
Each year in the past 5 years LRCX had a positive operating cash flow.
1.2 Ratios
LRCX's Return On Assets of 23.33% is amongst the best of the industry. LRCX outperforms 95.45% of its industry peers.
With an excellent Return On Equity value of 48.98%, LRCX belongs to the best of the industry, outperforming 95.45% of the companies in the same industry.
The Return On Invested Capital of LRCX (32.17%) is better than 97.27% 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 11.17%.
The 3 year average ROIC (31.96%) for LRCX is below the current ROIC(32.17%), indicating increased profibility in the last year.
| 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
The Profit Margin of LRCX (27.19%) is better than 89.09% of its industry peers.
In the last couple of years the Profit Margin of LRCX has grown nicely.
LRCX's Operating Margin of 30.88% is amongst the best of the industry. LRCX outperforms 90.91% of its industry peers.
In the last couple of years the Operating Margin of LRCX has grown nicely.
With a Gross Margin value of 48.06%, LRCX perfoms like the industry average, outperforming 60.00% 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 | 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so LRCX is creating value.
The number of shares outstanding for LRCX has been increased compared to 1 year ago.
Compared to 5 years ago, LRCX has more shares outstanding
The debt/assets ratio for LRCX has been reduced compared to a year ago.
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 amongst the best in the industry. LRCX outperforms 80.91% of its industry peers.
The Debt to FCF ratio of LRCX is 1.18, which is an excellent value as it means it would take LRCX, only 1.18 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.18, LRCX is in the better half of the industry, outperforming 74.55% of the companies in the same industry.
A Debt/Equity ratio of 0.39 indicates that LRCX is not too dependend on debt financing.
LRCX has a worse Debt to Equity ratio (0.39) than 66.36% 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 | 0.39 | ||
| Debt/FCF | 1.18 | ||
| Altman-Z | 10.2 |
ROIC/WACC2.82
WACC11.39%
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.
LRCX has a Current ratio of 2.45. This is in the lower half of the industry: LRCX underperforms 62.73% of its industry peers.
A Quick Ratio of 1.64 indicates that LRCX should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.64, LRCX is not doing good in the industry: 66.36% of the companies in the same industry are doing better.
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
LRCX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 28.78%, which is quite impressive.
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%.
The Revenue has been growing by 9.08% on average over the past years. This is quite good.
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
LRCX is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 15.50% yearly.
Based on estimates for the next years, LRCX will show a quite strong growth in Revenue. The Revenue will grow by 10.63% on average per year.
EPS Next Y35.07%
EPS Next 2Y16.39%
EPS Next 3Y16.49%
EPS Next 5Y15.5%
Revenue Next Year22.8%
Revenue Next 2Y12.13%
Revenue Next 3Y11.84%
Revenue Next 5Y10.63%
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
With a Price/Earnings ratio of 22.39, LRCX is valued on the expensive side.
Based on the Price/Earnings ratio, LRCX is valued a bit cheaper than the industry average as 69.09% of the companies are valued more expensively.
LRCX is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 25.82, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 19.75, LRCX is valued on the expensive side.
LRCX's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. LRCX is cheaper than 63.64% of the companies in the same industry.
LRCX is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.39 | ||
| Fwd PE | 19.75 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of LRCX indicates a somewhat cheap valuation: LRCX is cheaper than 67.27% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, LRCX is valued a bit cheaper than the industry average as 73.64% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.33 | ||
| EV/EBITDA | 18.46 |
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 16.49% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.64
PEG (5Y)1.42
EPS Next 2Y16.39%
EPS Next 3Y16.49%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.09%, LRCX has a reasonable but not impressive dividend return.
LRCX's Dividend Yield is rather good when compared to the industry average which is at 2.41. LRCX pays more dividend than 80.91% of the companies in the same industry.
With a Dividend Yield of 1.09, LRCX pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.09% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)-20.64%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
23.95% of the earnings are spent on dividend by LRCX. This is a low number and sustainable payout ratio.
DP23.95%
EPS Next 2Y16.39%
EPS Next 3Y16.49%
81.06
-1.5 (-1.82%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners85.78%
Inst Owner Change3.45%
Ins Owners0.25%
Ins Owner Change7.7%
Market Cap103.69B
Analysts81.11
Price Target91.39 (12.74%)
Short Float %1.84%
Short Ratio1.78
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.09% |
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)-6.23%
PT rev (3m)-0.71%
EPS NQ rev (1m)22.9%
EPS NQ rev (3m)23.14%
EPS NY rev (1m)6.85%
EPS NY rev (3m)6.66%
Revenue NQ rev (1m)8.44%
Revenue NQ rev (3m)8.55%
Revenue NY rev (1m)2.75%
Revenue NY rev (3m)3.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.39 | ||
| Fwd PE | 19.75 | ||
| P/S | 6.05 | ||
| P/FCF | 27.33 | ||
| P/OCF | 23.14 | ||
| P/B | 10.9 | ||
| P/tB | 13.44 | ||
| EV/EBITDA | 18.46 |
EPS(TTM)3.62
EY4.47%
EPS(NY)4.1
Fwd EY5.06%
FCF(TTM)2.97
FCFY3.66%
OCF(TTM)3.5
OCFY4.32%
SpS13.4
BVpS7.44
TBVpS6.03
PEG (NY)0.64
PEG (5Y)1.42
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 | 10.2 |
F-Score7
WACC11.39%
ROIC/WACC2.82
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 5Y15.5%
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 5Y10.63%
EBIT growth 1Y30.25%
EBIT growth 3Y-1.18%
EBIT growth 5Y11.88%
EBIT Next Year32.89%
EBIT Next 3Y17.53%
EBIT Next 5Y14.63%
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%