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Lam Research (LRCX) Stock Sinks As 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 $662, marking a -0.9% move from the previous day. This move lagged the S&P 500's daily gain of 0.77%.

Heading into today, shares of the semiconductor equipment maker had gained 27.01% over the past month, outpacing the Computer and Technology sector's gain of 10.54% and the S&P 500's gain of 7.34% in that time.

Investors will be hoping for strength from LRCX as it approaches its next earnings release, which is expected to be April 21, 2021. On that day, LRCX is projected to report earnings of $6.56 per share, which would represent year-over-year growth of 64.82%. Our most recent consensus estimate is calling for quarterly revenue of $3.7 billion, up 47.75% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $24.81 per share and revenue of $14.09 billion. These totals would mark changes of +55.55% and +40.31%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for LRCX. 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.

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. Within the past 30 days, our consensus EPS projection remained stagnant. 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 26.56. This valuation marks a premium compared to its industry's average Forward P/E of 24.91.

We can also see that LRCX currently has a PEG ratio of 1.24. 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. LRCX's industry had an average PEG ratio of 1.69 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 67, putting it in the top 27% 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.

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


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Zacks Investment Research