LAM RESEARCH CORP (LRCX)
US5128071082 - Common Stock
We assign a fundamental rating of 7 out of 10 to LRCX. LRCX was compared to 107 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 valued too expensively and it also shows a decent growth rate.
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
With an excellent Return On Assets value of 18.41%, LRCX belongs to the best of the industry, outperforming 91.51% of the companies in the same industry.
With an excellent Return On Equity value of 42.06%, LRCX belongs to the best of the industry, outperforming 96.23% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 24.54%, LRCX belongs to the top of the industry, outperforming 95.28% of the companies in the same industry.
LRCX had an Average Return On Invested Capital over the past 3 years of 33.96%. This is significantly above the industry average of 11.36%.
The last Return On Invested Capital (24.54%) for LRCX is well below the 3 year average (33.96%), which needs to be investigated, but indicates that LRCX had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.41% | ||
| ROE | 42.06% | ||
| ROIC | 24.54% |
ROA(3y)25.13%
ROA(5y)21.82%
ROE(3y)64.38%
ROE(5y)56.71%
ROIC(3y)33.96%
ROIC(5y)29.06%
1.3 Margins
LRCX's Profit Margin of 24.15% is amongst the best of the industry. LRCX outperforms 82.08% of its industry peers.
In the last couple of years the Profit Margin of LRCX has grown nicely.
LRCX has a Operating Margin of 28.11%. This is amongst the best in the industry. LRCX outperforms 84.91% of its industry peers.
In the last couple of years the Operating Margin of LRCX has remained more or less at the same level.
With a Gross Margin value of 45.94%, LRCX perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
LRCX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 28.11% | ||
| PM (TTM) | 24.15% | ||
| GM | 45.94% |
OM growth 3Y4.5%
OM growth 5Y0.95%
PM growth 3Y4.9%
PM growth 5Y3.78%
GM growth 3Y-0.6%
GM growth 5Y-0.68%
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 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
An Altman-Z score of 10.39 indicates that LRCX is not in any danger for bankruptcy at the moment.
LRCX has a Altman-Z score of 10.39. This is amongst the best in the industry. LRCX outperforms 83.02% of its industry peers.
LRCX has a debt to FCF ratio of 1.02. This is a very positive value and a sign of high solvency as it would only need 1.02 years to pay back of all of its debts.
LRCX's Debt to FCF ratio of 1.02 is fine compared to the rest of the industry. LRCX outperforms 74.53% of its industry peers.
A Debt/Equity ratio of 0.61 indicates that LRCX is somewhat dependend on debt financing.
LRCX has a Debt to Equity ratio of 0.61. This is in the lower half of the industry: LRCX underperforms 75.47% 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 | 0.61 | ||
| Debt/FCF | 1.02 | ||
| Altman-Z | 10.39 |
ROIC/WACC2.14
WACC11.45%
2.3 Liquidity
A Current Ratio of 3.06 indicates that LRCX has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 3.06, LRCX is in line with its industry, outperforming 49.06% of the companies in the same industry.
A Quick Ratio of 2.02 indicates that LRCX has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 2.02, LRCX is in line with its industry, outperforming 45.28% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.06 | ||
| Quick Ratio | 2.02 |
3. Growth
3.1 Past
The earnings per share for LRCX have decreased strongly by -26.82% in the last year.
The Earnings Per Share has been growing by 13.76% on average over the past years. This is quite good.
The Revenue for LRCX has decreased by -24.83% in the past year. This is quite bad
LRCX shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.49% yearly.
EPS 1Y (TTM)-26.82%
EPS 3Y28.82%
EPS 5Y13.76%
EPS growth Q2Q-29.79%
Revenue 1Y (TTM)-24.83%
Revenue growth 3Y20.16%
Revenue growth 5Y9.49%
Revenue growth Q2Q-28.79%
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 10.38% yearly.
LRCX is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.46% yearly.
EPS Next Y-13.1%
EPS Next 2Y3.54%
EPS Next 3Y10.04%
EPS Next 5Y10.38%
Revenue Next Year-14.91%
Revenue Next 2Y0.13%
Revenue Next 3Y5.38%
Revenue Next 5Y5.46%
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.
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 31.83, LRCX can be considered very expensive at the moment.
The rest of the industry has a similar Price/Earnings ratio as LRCX.
LRCX's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 24.80.
The Price/Forward Earnings ratio is 23.81, which indicates a rather expensive current valuation of LRCX.
LRCX's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. LRCX is cheaper than 69.81% 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 21.27, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.83 | ||
| Fwd PE | 23.81 |
4.2 Price Multiples
61.32% of the companies in the same industry are more expensive than LRCX, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, LRCX is valued cheaply inside the industry as 80.19% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.46 | ||
| EV/EBITDA | 26.41 |
4.3 Compensation for Growth
LRCX has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.31
EPS Next 2Y3.54%
EPS Next 3Y10.04%
5. Dividend
5.1 Amount
LRCX has a yearly dividend return of 0.81%, which is pretty low.
Compared to an average industry Dividend Yield of 1.95, LRCX pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.40, LRCX's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
5.2 History
On average, the dividend of LRCX grows each year by 28.38%, which is quite nice.
LRCX has paid a dividend for at least 10 years, which is a reliable track record.
LRCX has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)28.38%
Div Incr Years9
Div Non Decr Years9
5.3 Sustainability
27.79% 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.
DP27.79%
EPS Next 2Y3.54%
EPS Next 3Y10.04%
LAM RESEARCH CORP
NASDAQ:LRCX (4/19/2024, 4:20:00 PM)
After market: 870.25 0 (0%)870.25
-18.67 (-2.1%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
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Market Cap114.09B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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PT rev (1m)
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EPS NY rev (3m)
Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.83 | ||
| Fwd PE | 23.81 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)2.31
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.41% | ||
| ROE | 42.06% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 28.11% | ||
| PM (TTM) | 24.15% | ||
| GM | 45.94% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.76
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.61 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 3.06 | ||
| Quick Ratio | 2.02 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-26.82%
EPS 3Y28.82%
EPS 5Y
EPS growth Q2Q
EPS Next Y-13.1%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-24.83%
Revenue growth 3Y20.16%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
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