LAM RESEARCH CORP (LRCX) Stock Fundamental Analysis
USA - NASDAQ:LRCX - US5128073062 - Common Stock
151.68 USD
+4.14 (+2.81%)
151.85 USD
+0.17 (+0.11%)
LRCX gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 112 industry peers in the Semiconductors & Semiconductor Equipment industry. LRCX has an excellent profitability rating, but there are some minor concerns on its financial health. LRCX is growing strongly while it is still valued neutral. This is a good combination! With these ratings, LRCX could be worth investigating further 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.
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
With an excellent Return On Assets value of 26.53%, LRCX belongs to the best of the industry, outperforming 97.32% of the companies in the same industry.
With an excellent Return On Equity value of 57.01%, LRCX belongs to the best of the industry, outperforming 96.43% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 37.82%, LRCX belongs to the top of the industry, outperforming 99.11% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for LRCX is significantly above the industry average of 11.03%.
The last Return On Invested Capital (37.82%) for LRCX is above the 3 year average (31.47%), which is a sign of increasing profitability.
| 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
LRCX has a Profit Margin of 29.66%. This is amongst the best in the industry. LRCX outperforms 91.07% of its industry peers.
In the last couple of years the Profit Margin of LRCX has grown nicely.
With an excellent Operating Margin value of 33.00%, LRCX belongs to the best 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 has a better Gross Margin (49.31%) than 60.71% of its industry peers.
LRCX's Gross Margin has been stable in the last couple of years.
| 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
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 reduced compared to 1 year ago.
LRCX has less shares outstanding than it did 5 years ago.
LRCX has a better debt/assets ratio than last year.
2.2 Solvency
LRCX has a debt to FCF ratio of 0.81. This is a very positive value and a sign of high solvency as it would only need 0.81 years to pay back of all of its debts.
LRCX's Debt to FCF ratio of 0.81 is fine compared to the rest of the industry. LRCX outperforms 76.79% of its industry peers.
A Debt/Equity ratio of 0.37 indicates that LRCX is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.37, LRCX is doing worse than 65.18% of the companies in the same industry.
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/WACC3.27
WACC11.55%
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 68.75% of its industry peers.
A Quick Ratio of 1.60 indicates that LRCX should not have too much problems paying its short term obligations.
LRCX has a worse Quick ratio (1.60) than 67.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.21 | ||
| Quick Ratio | 1.6 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 41.65% 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 25.66% in the past year. This is a very strong growth!
The Revenue has been growing by 12.91% on average over the past years. This is quite good.
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
Based on estimates for the next years, LRCX will show a quite strong growth in Earnings Per Share. The EPS will grow by 16.67% on average per year.
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
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
The Price/Earnings ratio is 33.41, which means the current valuation is very expensive for LRCX.
Compared to the rest of the industry, the Price/Earnings ratio of LRCX indicates a somewhat cheap valuation: LRCX is cheaper than 71.43% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.91. LRCX is valued slightly more expensive when compared to this.
A Price/Forward Earnings ratio of 27.87 indicates a quite expensive valuation of LRCX.
Based on the Price/Forward Earnings ratio, LRCX is valued a bit cheaper than 65.18% of the companies in the same industry.
LRCX is valuated rather expensively when we compare the Price/Forward Earnings ratio to 22.92, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.41 | ||
| Fwd PE | 27.87 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, LRCX is valued a bit cheaper than 66.96% of the companies in the same industry.
75.00% of the companies in the same industry are more expensive than LRCX, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.46 | ||
| EV/EBITDA | 26.8 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive 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 14.42% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.83
PEG (5Y)1.59
EPS Next 2Y14.65%
EPS Next 3Y14.42%
5. Dividend
5.1 Amount
With a yearly dividend of 0.70%, LRCX is not a good candidate for dividend investing.
LRCX's Dividend Yield is rather good when compared to the industry average which is at 2.14. LRCX pays more dividend than 80.36% of the companies in the same industry.
With a Dividend Yield of 0.70, LRCX pays less dividend than the S&P500 average, which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.7% |
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 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
LRCX pays out 20.32% of its income as dividend. This is a 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%
151.68
+4.14 (+2.81%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners89.15%
Inst Owner Change0.27%
Ins Owners0.26%
Ins Owner Change-1.5%
Market Cap191.27B
Revenue(TTM)19.59B
Net Income(TTM)5.81B
Analysts80
Price Target118.66 (-21.77%)
Short Float %2.36%
Short Ratio2.51
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.7% |
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)5.5%
PT rev (3m)19.18%
EPS NQ rev (1m)0.2%
EPS NQ rev (3m)22.4%
EPS NY rev (1m)0.47%
EPS NY rev (3m)10.71%
Revenue NQ rev (1m)0.17%
Revenue NQ rev (3m)12.81%
Revenue NY rev (1m)0.5%
Revenue NY rev (3m)7.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.41 | ||
| Fwd PE | 27.87 | ||
| P/S | 9.76 | ||
| P/FCF | 34.46 | ||
| P/OCF | 29.96 | ||
| P/B | 18.77 | ||
| P/tB | 22.86 | ||
| EV/EBITDA | 26.8 |
EPS(TTM)4.54
EY2.99%
EPS(NY)5.44
Fwd EY3.59%
FCF(TTM)4.4
FCFY2.9%
OCF(TTM)5.06
OCFY3.34%
SpS15.54
BVpS8.08
TBVpS6.63
PEG (NY)2.83
PEG (5Y)1.59
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
WACC11.55%
ROIC/WACC3.27
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 33.41 and the Price/Book (PB) ratio is 18.77.
Can you provide the financial health for LRCX stock?
The financial health rating of LAM RESEARCH CORP (LRCX) is 6 / 10.