Lam Research Corp. (LRCX): Zacks Rank Buy

By Michael Vodicka
On 1:00 am EDT, Thursday October 29, 2009

Lam Research Corp. (NasdaqGS: LRCX - News) recently reported better than expected third-quarter results that saw the company swing back into profitability after a couple tough quarters due to the volatile economy.

Company Description

Lam Research Corp. designs and manufactures semiconductor processing equipment used in the fabrication of integrated circuits. The company was founded in 1980 and has a market cap of $4.28 billion.

Shares of LRCX are up big over the last 6 months after bottoming out in early March, helped by the company's better than expected third-quarter results, reported on Oct 21.

Third-Quarter Results

Revenue was down from last year, falling 28% to $318.5 million, but earnings came in 8 cents ahead of the Zacks Consensus Estimate at 3 cents per share.

Building on the positive momentum, the company said it expects shipments of $480 million in the fourth quarter, up from $355 million last year.

Estimates Rise

Estimates jumped higher after the solid quarter, with the current year adding 67 cents and moving to $1.02 per share. The next-year estimate is bullish, pegged at $2.06, a bullish 102% growth projection.

Valuation

The valuation picture differs significantly based upon the current or next-year estimate. Considering the current year, shares trade at 32X, a premium to the overall market.

The Chart

Shares of LRCX recently hit a new 52-week high just above $38 after rallying from the previously mentioned March low. Take a look at the big gains below.