When Should You Buy Lam Research Corporation (NASDAQ:LRCX)?
Today we’re going to take a look at the well-established Lam Research Corporation (NASDAQ:LRCX). The company’s stock saw significant share price volatility over the past couple of months on the NasdaqGS, rising to the highs of $190.02 and falling to the lows of $135.78. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Lam Research’s current trading price of $147.85 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Lam Research’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Lam Research
What is Lam Research worth?
Good news, investors! Lam Research is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $261.54, but it is currently trading at US$148 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Lam Research’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What does the future of Lam Research look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Lam Research’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since LRCX is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on LRCX for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy LRCX. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Lam Research. You can find everything you need to know about Lam Research in the latest infographic research report. If you are no longer interested in Lam Research, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
