Lam Research Corporation LRCX is slated to report third-quarter fiscal 2020 results on Apr 22. In the last reported quarter, the company delivered a positive earnings surprise of 5.3%.
Lam Research’s surprise history has been pretty impressive. The company surpassed estimates in each of the trailing four quarters, with the averagebeing 6.8%.
For the fiscal third quarter, the Zacks Consensus Estimate for earnings has decreased 10.1% to $4.02 per share over the past 30 days. This indicates a decline of 8.7% from the year-ago reported figure.
The consensus mark for revenues is pegged at $2.65 billion, implying an increase of 8.8% from the year-ago reported figure.
Let’s see how things have shaped up for this announcement.
Lam Research Corporation Price and EPS Surprise
Lam Research Corporation price-eps-surprise | Lam Research Corporation Quote
Factors to Note
Due the global coronavirus-driven economic crisis, the company’s fiscal third-quarter sales might have been affected. The company was forced to temporarily stop on-site work at Fremont and Livermore locations, which may have further impacted top-line growth. However, the chip manufacturing company has rebounded operations in China as infections from the virus have receded in the country.
It has been facing significant competition in all product and service categories in the semiconductor capital equipment market. Volatility in the PC market is likely to have weighed on its performance.
Nevertheless, Lam Research has been witnessing improvement in the memory market, led by NAND. Increased adoption rates for 3D NAND technology, FinFETs and multi-patterning are expected to have aided its top-line growth.
In addition, the company has been undertaking cost-reduction activities and density scaling for 3D NAND, as well as new memory technologies. It witnessed share gains in the foundry and logic segment. All these factors are likely to have boosted Lam Research’s top-line growth in the quarter.
Our proven model does not conclusively predict an earnings beat for Lam Research this time around. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Earnings ESP: The company has an Earnings ESP of -6.79%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, Lam Research has a Zacks Rank #3.
Stocks to Consider
Here are a few stocks that you may want to consider, as our model shows that these have the right combination of elements to post a positive earnings surprise in the quarter to be reported.
Synopsys, Inc. SNPS has an Earnings ESP of +2.69% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Wayfair Inc. W has an Earnings ESP of +2.62% and a Zacks Rank of 2.
PTC Inc. PTC has an Earnings ESP of +2.89% and a Zacks Rank of 3.
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