Lam Research (LRCX) AI Stock Analysis

• Market Cap: $124.96B
• Dividend Yield: 0.94%
• Average Volume (3M): 9.81M
• Price to Earnings (P/E): 27.2
• Beta (1Y): 1.97
• Revenue Growth: 20.33%
• EPS Growth: 31.89%
• Country: US
• Employees: 18,600
• Sector: Technology
• Sector Strength: 94
• Industry: Semiconductors
• EPS (TTM): 1.04
• Shares Outstanding: 1,279,118,000
• 10 Day Avg. Volume: 9,205,581
• 30 Day Avg. Volume: 9,811,469
• PEG Ratio: 2.97
• Price to Book (P/B): 13.19
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 30.53
• Enterprise Value/Market Cap: 0.99
• Enterprise Value/Revenue: 1.94
• Enterprise Value/Gross Profit: 15.05
• Enterprise Value/Ebitda: 5.95
• 1Y Price Target: $101.37
• Price Target Upside: 3.77% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 20

• Rating: 78 Outperform
• Price Target: $116.00 ▲(18.74%Upside)

Lam Research's strong financial performance and positive earnings call are the primary drivers of its score. While technical analysis suggests a potential overbought condition, the company's strategic position in the semiconductor industry and solid guidance balance these concerns. The relatively high valuation is a minor detractor.

Positive Factors

Revenue and Margin Performance

Lam delivered strong revenue, margins, and EPS results, with guidance above expectations, driven by strong near-term fundamentals.

Sales Growth and Market Performance

Multiple drivers, including foundry share gains and NAND upgrades, are enabling Lam Research's sales growth to outperform industry expectations.

Supply Chain and Tariff Management

Previous investments in supply chain and capacity expansion closer to customers allow Lam Research to reduce the impact of tariffs and improve its global footprint.

Negative Factors

Market Segment Weakness

Management sees a lighter C2H25, which could be ~$700MM lower in revenue than C1H25, as all market segments, i.e. foundry/logic, DRAM, and NAND, are expected to trend lower.

Revenue Impact from China Restrictions

A $700 million sales headwind from restrictions on China customers may impact Lam Research's second-half revenue.

Uncertain Future Revenue

Expectations for 2H revenue decline as uncertain macro backdrop dampens the outlook.

Lam Research Business Overview & Revenue Model

Company Description

Lam Research Corporation (LRCX) is a global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. Headquartered in Fremont, California, the company designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. Lam Research's core products include etch, deposition, strip, and wafer cleaning systems, which are critical in the production of semiconductors for a wide range of electronic devices.

How the Company Makes Money

Lam Research makes money primarily through the sale of wafer fabrication equipment and the provision of related services. Its revenue model revolves around two key streams: system sales and customer support-related services. System sales involve the sale of new equipment and technologies to semiconductor manufacturers, while customer support-related services include maintenance, spare parts, upgrades, and refurbishment of existing equipment. The company also benefits from long-term supply agreements and partnerships with leading semiconductor manufacturers, which contribute to consistent revenue streams. Additionally, Lam Research invests in research and development to innovate and maintain its competitive edge, ensuring a steady demand for its advanced solutions in the rapidly evolving semiconductor industry.

Lam Research Financial Statement Overview

Summary

Lam Research exhibits strong financial health with robust profitability metrics, a stable balance sheet, and effective cash flow generation. Despite moderate revenue growth, the company's financial stability and strong cash flow provide a solid foundation for future growth.

Income Statement

Lam Research shows robust profitability with a strong gross profit margin of 48.1% and net profit margin of 27.2% in TTM (Trailing-Twelve-Months). Revenue growth has been moderate at 15% compared to the previous annual period. The EBIT margin is solid at 30.9%, indicating efficient operational management. Despite the decline in revenue from the previous annual period, the company's profitability metrics remain strong, highlighting resilience in the semiconductor market.

Balance Sheet

The company's balance sheet is stable with a debt-to-equity ratio of 0.47, reflecting a balanced leverage position. Return on equity is impressive at 48.98%, suggesting effective use of shareholder funds. The equity ratio of 47.6% ensures a strong capital structure. The high ROE and manageable debt levels position Lam Research well within the industry, although the equity growth could be more aggressive.

Cash Flow

Lam Research demonstrates strong cash flow generation with a free cash flow to net income ratio of 0.94 in TTM. The free cash flow growth rate is 2.94%, indicating consistent cash generation. Operating cash flow to net income ratio stands at 0.96, showcasing efficient conversion of earnings to cash. Despite a decrease in operating cash flow from the previous period, the company maintains a healthy cash flow position, supporting its operational and strategic investments.

Breakdown	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	14.91B	17.43B	17.23B	14.63B	10.04B
Gross Profit	7.05B	7.78B	7.87B	6.81B	4.61B
EBITDA	4.91B	5.64B	5.72B	4.79B	2.94B
Net Income	3.83B	4.51B	4.61B	3.91B	2.25B
Balance Sheet
Total Assets	18.74B	18.78B	17.20B	15.89B	14.56B
Cash, Cash Equivalents and Short-Term Investments	5.85B	5.37B	3.66B	5.73B	6.71B
Total Debt	4.98B	5.01B	5.01B	5.00B	5.81B
Total Liabilities	10.21B	10.57B	10.92B	9.86B	9.38B
Stockholders Equity	8.54B	8.21B	6.28B	6.03B	5.18B
Cash Flow
Free Cash Flow	4.26B	4.68B	2.55B	3.24B	1.92B
Operating Cash Flow	4.65B	5.18B	3.10B	3.59B	2.13B
Investing Cash Flow	-370.61M	-534.56M	612.27M	73.27M	-244.08M
Financing Cash Flow	-4.00B	-2.83B	-4.58B	-4.17B	-623.93M

Lam Research Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 97.69
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LRCX, the sentiment is Positive. The current price of 97.69 is below the 20-day moving average (MA) of 99.00, above the 50-day MA of 91.05, and above the 200-day MA of 79.22, indicating a neutral trend. The MACD of 2.83 indicates Positive momentum. The RSI at 53.64 is Neutral, neither overbought nor oversold. The STOCH value of 61.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LRCX.

Lam Research Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KLAC	82 Outperform	$117.99B	32.43	104.10%	0.76%	20.44%	44.14%
AMD	80 Outperform	$250.86B	113.41	3.90%	―	21.71%	99.00%
AMAT	80 Outperform	$150.18B	22.78	36.37%	1.10%	6.12%	-5.66%
ASML	79 Outperform	$287.05B	28.13	56.14%	0.93%	27.09%	40.94%
LRCX	78 Outperform	$124.96B	27.21	53.14%	0.94%	20.33%	31.89%
Sector *	63 Neutral	$34.27B	4.89	-11.70%	1.94%	5.41%	-20.02%
INTC	56 Neutral	$100.76B	―	-18.66%	2.15%	-3.97%	-562.40%

Lam Research Corporate Events

Lam Research Amends Bylaws for Shareholder Meetings

On May 20, 2025, Lam Research Corporation’s Board of Directors amended the company’s bylaws to allow stockholders owning at least 20% of the company’s shares for over a year to call special meetings. This change aims to ensure stockholders receive timely and accurate information while preventing resource wastage from redundant meetings.

The most recent analyst rating on (LRCX) stock is a Buy with a $102.50 price target. To see the full list of analyst forecasts on Lam Research stock, see the LRCX Stock Forecast page.