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Lam Research (LRCX) Gains As Market Dips: What You Should Know

Zacks Equity Research
Cronos Group (CRON) closed at $14.99 in the latest trading session, marking a +0.33% move from the prior day.

Lam Research (LRCX) closed at $166.06 in the latest trading session, marking a +0.34% move from the prior day. This move outpaced the S&P 500's daily loss of 0.79%. Elsewhere, the Dow lost 0.85%, while the tech-heavy Nasdaq lost 1.11%.

Prior to today's trading, shares of the semiconductor equipment maker had gained 24.17% over the past month. This has outpaced the Computer and Technology sector's gain of 12.9% and the S&P 500's gain of 13.44% in that time.

Investors will be hoping for strength from LRCX as it approaches its next earnings release, which is expected to be April 16, 2019. In that report, analysts expect LRCX to post earnings of $3.38 per share. This would mark a year-over-year decline of 29.44%. Our most recent consensus estimate is calling for quarterly revenue of $2.40 billion, down 16.92% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $13.90 per share and revenue of $9.58 billion. These totals would mark changes of -22.22% and -13.55%, respectively, from last year.

Any recent changes to analyst estimates for LRCX should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Over the past month, the Zacks Consensus EPS estimate has moved 4.17% lower. LRCX is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, LRCX is currently trading at a Forward P/E ratio of 11.9. For comparison, its industry has an average Forward P/E of 11.9, which means LRCX is trading at a no noticeable deviation to the group.

It is also worth noting that LRCX currently has a PEG ratio of 0.99. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Semiconductor Equipment - Wafer Fabrication industry currently had an average PEG ratio of 1.24 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 186, which puts it in the bottom 28% 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.

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

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