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Lam Research (LRCX) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Lam Research (LRCX) closed the most recent trading day at $199.77, moving -0.78% from the previous trading session. This change lagged the S&P 500's daily loss of 0.32%. Meanwhile, the Dow lost 0.47%, and the Nasdaq, a tech-heavy index, lost 0.34%.

Coming into today, shares of the semiconductor equipment maker had lost 4.5% in the past month. In that same time, the Computer and Technology sector lost 6.27%, while the S&P 500 lost 4.64%.

Investors will be hoping for strength from LRCX as it approaches its next earnings release. The company is expected to report EPS of $3.01, down 10.42% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.19 billion, down 6.13% from the year-ago period.

LRCX's full-year Zacks Consensus Estimates are calling for earnings of $13.57 per share and revenue of $9.28 billion. These results would represent year-over-year changes of -6.74% and -3.87%, respectively.

It is also important to note the recent changes to analyst estimates for LRCX. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 5.92% lower within the past month. LRCX is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that LRCX has a Forward P/E ratio of 14.84 right now. For comparison, its industry has an average Forward P/E of 20.61, which means LRCX is trading at a discount to the group.

Also, we should mention that LRCX has a PEG ratio of 1.24. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Semiconductor Equipment - Wafer Fabrication industry currently had an average PEG ratio of 2.19 as of yesterday's close.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 232, which puts it in the bottom 10% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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