LAM RESEARCH CORP (LRCX) Stock Fundamental Analysis
NASDAQ:LRCX - US5128073062 - Common Stock
100.15 USD
-3.94 (-3.79%)
99.93 USD
-0.22 (-0.22%)
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. While LRCX has a great profitability rating, there are some minor concerns on its financial health. LRCX has a correct valuation and a medium growth rate.
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
Looking at the Return On Assets, with a value of 25.10%, LRCX belongs to the top of the industry, outperforming 96.43% of the companies in the same industry.
Looking at the Return On Equity, with a value of 54.33%, LRCX belongs to the top of the industry, outperforming 95.54% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 35.49%, LRCX belongs to the top of the industry, outperforming 98.21% 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 10.74%.
The last Return On Invested Capital (35.49%) for LRCX is above the 3 year average (31.47%), which is a sign of increasing profitability.
| 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 better Profit Margin (29.06%) than 90.18% 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 91.96% of its industry peers.
LRCX's Operating Margin has improved in the last couple of years.
LRCX's Gross Margin of 48.70% is fine compared to the rest of the industry. LRCX outperforms 60.71% of its industry peers.
LRCX's Gross Margin has been stable in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so LRCX is creating value.
Compared to 1 year ago, LRCX has less shares outstanding
Compared to 5 years ago, LRCX has less shares outstanding
LRCX has a better debt/assets ratio than last year.
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.
With a decent Debt to FCF ratio value of 0.83, LRCX is doing good in the industry, outperforming 76.79% of the companies in the same industry.
A Debt/Equity ratio of 0.38 indicates that LRCX is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.38, LRCX is doing worse than 66.96% 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/WACC3.12
WACC11.36%
2.3 Liquidity
A Current Ratio of 2.21 indicates that LRCX has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.21, LRCX is doing worse than 70.54% of the companies in the same industry.
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: 69.64% 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
LRCX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 36.63%, which is quite impressive.
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 23.68% in the past year. This is a very strong growth!
Measured over the past years, LRCX shows a quite strong growth in Revenue. The Revenue has been growing by 12.91% on average per year.
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 16.67% on average per year.
LRCX is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.88% yearly.
EPS Next Y10.07%
EPS Next 2Y12.01%
EPS Next 3Y12.25%
EPS Next 5Y16.67%
Revenue Next Year9.03%
Revenue Next 2Y9.42%
Revenue Next 3Y8.84%
Revenue Next 5Y7.88%
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
With a Price/Earnings ratio of 24.19, LRCX is valued on the expensive side.
LRCX's Price/Earnings ratio is a bit cheaper when compared to the industry. LRCX is cheaper than 75.00% of the companies in the same industry.
When comparing the Price/Earnings ratio of LRCX to the average of the S&P500 Index (27.13), we can say LRCX is valued inline with the index average.
A Price/Forward Earnings ratio of 21.98 indicates a rather expensive valuation of LRCX.
LRCX's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. LRCX is cheaper than 69.64% 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 22.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.19 | ||
| Fwd PE | 21.98 |
4.2 Price Multiples
LRCX's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. LRCX is cheaper than 69.64% of the companies in the same industry.
LRCX's Price/Free Cash Flow ratio is rather cheap when compared to the industry. LRCX is cheaper than 80.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.47 | ||
| EV/EBITDA | 19.86 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of LRCX may justify a higher PE ratio.
LRCX's earnings are expected to grow with 12.25% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.4
PEG (5Y)1.15
EPS Next 2Y12.01%
EPS Next 3Y12.25%
5. Dividend
5.1 Amount
LRCX has a yearly dividend return of 0.88%, which is pretty low.
LRCX's Dividend Yield is rather good when compared to the industry average which is at 2.35. LRCX pays more dividend than 80.36% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.32, LRCX's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.88% |
5.2 History
On average, the dividend of LRCX grows each year by 14.54%, which is quite nice.
LRCX has paid a dividend for at least 10 years, which is 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.
The dividend of LRCX is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP21.45%
EPS Next 2Y12.01%
EPS Next 3Y12.25%
100.15
-3.94 (-3.79%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners88.42%
Inst Owner Change0.61%
Ins Owners0.26%
Ins Owner Change-0.4%
Market Cap126.75B
Analysts80.51
Price Target111.72 (11.55%)
Short Float %2.26%
Short Ratio2.6
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.88% |
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)12.21%
PT rev (3m)22.24%
EPS NQ rev (1m)12.77%
EPS NQ rev (3m)30.34%
EPS NY rev (1m)10.19%
EPS NY rev (3m)11.02%
Revenue NQ rev (1m)6.89%
Revenue NQ rev (3m)16.29%
Revenue NY rev (1m)6.11%
Revenue NY rev (3m)6.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.19 | ||
| Fwd PE | 21.98 | ||
| P/S | 6.88 | ||
| P/FCF | 23.47 | ||
| P/OCF | 20.58 | ||
| P/B | 12.85 | ||
| P/tB | 15.74 | ||
| EV/EBITDA | 19.86 |
EPS(TTM)4.14
EY4.13%
EPS(NY)4.56
Fwd EY4.55%
FCF(TTM)4.27
FCFY4.26%
OCF(TTM)4.87
OCFY4.86%
SpS14.57
BVpS7.79
TBVpS6.36
PEG (NY)2.4
PEG (5Y)1.15
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
WACC11.36%
ROIC/WACC3.12
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 Y10.07%
EPS Next 2Y12.01%
EPS Next 3Y12.25%
EPS Next 5Y16.67%
Revenue 1Y (TTM)23.68%
Revenue growth 3Y2.29%
Revenue growth 5Y12.91%
Sales Q2Q%33.58%
Revenue Next Year9.03%
Revenue Next 2Y9.42%
Revenue Next 3Y8.84%
Revenue Next 5Y7.88%
EBIT growth 1Y36.42%
EBIT growth 3Y3.12%
EBIT growth 5Y17.15%
EBIT Next Year13.81%
EBIT Next 3Y12.52%
EBIT Next 5Y9.68%
FCF growth 1Y26.9%
FCF growth 3Y28.36%
FCF growth 5Y22.94%
OCF growth 1Y32.4%
OCF growth 3Y25.72%
OCF growth 5Y23.7%