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Lam Research (LRCX) Outpaces Stock Market Gains: What You Should Know

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Zacks Equity Research
·3 min read
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In the latest trading session, Lam Research (LRCX) closed at $649.50, marking a +1.42% move from the previous day. This change outpaced the S&P 500's 1.11% gain on the day.

Coming into today, shares of the semiconductor equipment maker had gained 17.88% in the past month. In that same time, the Computer and Technology sector gained 8.47%, while the S&P 500 gained 4.72%.

LRCX will be looking to display strength as it nears its next earnings release, which is expected to be April 21, 2021. The company is expected to report EPS of $6.56, up 64.82% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.7 billion, up 47.75% from the year-ago period.

LRCX's full-year Zacks Consensus Estimates are calling for earnings of $24.81 per share and revenue of $14.09 billion. These results would represent year-over-year changes of +55.55% and +40.31%, respectively.

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. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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. Within the past 30 days, our consensus EPS projection remained stagnant. LRCX is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, LRCX currently has a Forward P/E ratio of 26. This valuation marks a premium compared to its industry's average Forward P/E of 24.3.

Meanwhile, LRCX's PEG ratio is currently 1.22. 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 was holding an average PEG ratio of 1.64 at yesterday's closing price.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 30, which puts it in the top 12% 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.

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


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