U.S. Markets closed

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

Zacks Equity Research
Roper Technologies (ROP) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Lam Research (LRCX) closed the most recent trading day at $194.62, moving +0.94% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.05%. At the same time, the Dow added 0.26%, and the tech-heavy Nasdaq gained 0.3%.

Heading into today, shares of the semiconductor equipment maker had gained 7% over the past month, outpacing the Computer and Technology sector's gain of 3.73% and the S&P 500's gain of 3.08% in that time.

Investors will be hoping for strength from LRCX as it approaches its next earnings release, which is expected to be April 24, 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%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.40 billion, down 16.92% from the year-ago period.

LRCX's full-year Zacks Consensus Estimates are calling for earnings of $13.89 per share and revenue of $9.57 billion. These results would represent year-over-year changes of -22.27% and -13.58%, respectively.

Any recent changes to analyst estimates for LRCX should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. LRCX is currently a Zacks Rank #4 (Sell).

Looking at its valuation, LRCX is holding a Forward P/E ratio of 13.88. For comparison, its industry has an average Forward P/E of 14.54, which means LRCX is trading at a discount to the group.

We can also see that LRCX currently has a PEG ratio of 1.16. 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 was holding an average PEG ratio of 1.43 at yesterday's closing price.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 231, putting it in the bottom 10% 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.

To follow LRCX in the coming trading sessions, be sure to utilize Zacks.com.


Is your investment advisor fumbling your financial future?
See how you can more effectively safeguard your retirement with a new Special Report, “4 Warning Signs Your Investment Advisor Might Be Sabotaging Your Financial Future.” Click to get your free report.
 
Lam Research Corporation (LRCX) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research