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

·3 min read

Lam Research (LRCX) closed at $426.76 in the latest trading session, marking a -0.8% move from the prior day. This change lagged the S&P 500's daily loss of 0.41%. At the same time, the Dow lost 0.55%, and the tech-heavy Nasdaq gained 0.07%.

Prior to today's trading, shares of the semiconductor equipment maker had lost 15.57% over the past month. This has lagged the Computer and Technology sector's loss of 9.08% and the S&P 500's loss of 5.13% in that time.

Wall Street will be looking for positivity from Lam Research as it approaches its next earnings report date. The company is expected to report EPS of $9.53, up 14% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.92 billion, up 14.21% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $37.60 per share and revenue of $19.34 billion. These totals would mark changes of +13.53% and +12.25%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Lam Research. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Lam Research is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Lam Research has a Forward P/E ratio of 11.44 right now. For comparison, its industry has an average Forward P/E of 13.69, which means Lam Research is trading at a discount to the group.

We can also see that LRCX currently has a PEG ratio of 0.97. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. LRCX's industry had an average PEG ratio of 1.52 as of yesterday's close.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 93, putting it in the top 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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