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Lam Research (LRCX)
NASDAQ:LRCX
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Lam Research
(NASDAQ:LRCX)
Rating:78Outperform
Price Target:―
Positive Factors
Operational Improvements
Operational improvements and investments during the NAND downturn have led to a structural improvement in Lam Research's gross margins, bringing them closer to a long-term target.
Sales Growth
Multiple drivers, including foundry share gains and NAND upgrades, are enabling Lam Research's sales growth to outperform industry expectations.
Negative Factors
Export Restrictions
China revenue mix is expected to trend lower due to export restrictions, impacting revenue in the second half of CY25.
Revenue Impact
A $700 million sales headwind from restrictions on China customers may impact Lam Research's second-half revenue.
Lam Research (LRCX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$107.22B
Dividend Yield1.05%
Average Volume (3M)13.36M
Price to Earnings (P/E)23.4
Beta (1Y)1.97
Revenue Growth20.33%
EPS Growth31.89%
CountryUS
Employees18,600
SectorTechnology
Sector Strength76
IndustrySemiconductors
Share Statistics
EPS (TTM)1.04
Shares Outstanding1,279,118,000
10 Day Avg. Volume10,079,913
30 Day Avg. Volume13,364,046
Financial Highlights & Ratios
PEG Ratio2.29
Price to Book (P/B)10.17
Price to Sales (P/S)0.00
P/FCF Ratio23.55
Enterprise Value/Market Cap0.89
Enterprise Value/Revenue1.49
Enterprise Value/Gross Profit11.58
Enterprise Value/Ebitda4.58
Forecast
1Y Price Target
$90.87Price Target Upside9.76% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering23
Lam Research Business Overview & Revenue Model
Company DescriptionLam Research Corporation (LRCX) is a leading supplier of wafer fabrication equipment and services to the global semiconductor industry. The company operates in the technology sector, focusing on the design, manufacture, and servicing of equipment used in the production of integrated circuits. Lam Research’s core products include etch, deposition, strip, and clean equipment, which are critical for the fabrication of semiconductors used in a wide range of electronic devices.
How the Company Makes MoneyLam Research generates revenue primarily through the sale of semiconductor manufacturing equipment and related services. The company's key revenue streams include the sale of new equipment, spare parts, and comprehensive service agreements that offer maintenance and support for installed systems. Lam's financial performance is significantly influenced by its relationships with major semiconductor manufacturers, as well as its ability to innovate and provide cutting-edge solutions that meet the evolving demands of chipmakers. Additionally, strategic partnerships and collaborations with leading technology firms and research institutions contribute to its earnings by fostering advancements in semiconductor production technology.
Lam Research Key Performance Indicators (KPIs)
Any
Revenue by Segment
Analyzes revenue from different business segments, highlighting which areas drive growth and profitability, and indicating how well the company adapts to market demands and technological advancements.
Analyzes revenue from different business segments, highlighting which areas drive growth and profitability, and indicating how well the company adapts to market demands and technological advancements.
Data provided by:
Main Street Data
Main Street DataLam Research Financial Statement Overview
Summary
Lam Research exhibits strong financial health with robust profitability, a solid balance sheet, and effective cash flow management. While revenue growth is moderate, the company's strong profitability metrics and efficient capital management 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.85
Very Positive
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.78
Positive
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.80
Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 17.14B | 14.91B | 17.43B | 17.23B | 14.63B | 10.04B | Gross Profit |
| 8.24B | 7.05B | 7.78B | 7.87B | 6.81B | 4.61B | EBIT |
| 5.30B | 4.26B | 5.17B | 5.38B | 4.48B | 2.67B | EBITDA |
| 5.83B | 4.91B | 5.64B | 5.72B | 4.79B | 2.94B | Net Income Common Stockholders |
| 4.66B | 3.83B | 4.51B | 4.61B | 3.91B | 2.25B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 5.67B | 5.85B | 5.37B | 3.66B | 5.73B | 6.71B | Total Assets |
| 18.28B | 18.74B | 18.78B | 17.20B | 15.89B | 14.56B | Total Debt |
| 4.98B | 4.98B | 5.01B | 5.01B | 5.00B | 5.81B | Net Debt |
| -688.78M | -864.52M | -325.51M | 1.48B | 583.42M | 895.55M | Total Liabilities |
| 10.26B | 10.21B | 10.57B | 10.92B | 9.86B | 9.38B | Stockholders Equity |
| 8.02B | 8.54B | 8.21B | 6.28B | 6.03B | 5.18B |
| Cash Flow | Free Cash Flow | ||||
| 4.09B | 4.26B | 4.68B | 2.55B | 3.24B | 1.92B | Operating Cash Flow |
| 4.48B | 4.65B | 5.18B | 3.10B | 3.59B | 2.13B | Investing Cash Flow |
| -680.45M | -370.61M | -534.56M | 612.27M | 73.27M | -244.08M | Financing Cash Flow |
| -4.00B | -4.00B | -2.83B | -4.58B | -4.17B | -623.93M |
Lam Research Technical Analysis
Positive
82.79
Price Trends
73.47
Positive
76.10
Positive
76.60
Positive
Market Momentum
3.71
Negative
64.22
Neutral
79.73
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 82.79 is above the 20-day moving average (MA) of 77.38, above the 50-day MA of 73.47, and above the 200-day MA of 76.60, indicating a bullish trend. The MACD of 3.71 indicates Negative momentum. The RSI at 64.22 is Neutral, neither overbought nor oversold. The STOCH value of 79.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LRCX.
Lam Research Risk Analysis
Lam Research disclosed 30 risk factors in its most recent earnings report. Lam Research reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
Epidemics, Pandemics or Outbreaks of Diseases May Adversely Impact Our Business, Operations, and Financial Results Q4, 2024
Lam Research Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $134.82B | 20.20 | 36.37% | 0.96% | 6.12% | -5.66% | |
81 Outperform | $184.05B | 82.14 | 3.90% | ― | 21.71% | 99.00% | |
78 Outperform | $107.22B | 23.35 | 53.14% | 1.05% | 20.33% | 31.89% | |
78 Outperform | $290.12B | 31.55 | 55.21% | 0.79% | 16.46% | 21.29% | |
74 Outperform | $104.51B | 28.72 | 104.10% | 0.80% | 20.44% | 44.14% | |
60 Neutral | $11.56B | 10.24 | -7.04% | 2.94% | 7.46% | -10.54% | |
45 Neutral | $92.78B | ― | -18.66% | 2.35% | -3.97% | -562.40% |
* Technology Sector Average
Performance Comparison
LRCX
Lam Research
82.79
-12.73
-13.33%
AMD
Advanced Micro Devices
112.06
-53.46
-32.30%
AMAT
Applied Materials
162.23
-54.49
-25.14%
ASML
ASML Holding
737.17
-178.04
-19.45%
INTC
Intel
20.69
-10.53
-33.73%
KLAC
KLA
778.94
14.34
1.88%
Lam Research Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q3-2025)
| % Change Since: 24.07%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a strong performance in revenue and gross margins, with record-breaking results in foundry revenues and strategic wins in product development. However, challenges in the memory systems segment, particularly in China, and the potential impacts of tariffs create a balanced outlook.Q3-2025 Updates
Positive Updates
Record-Breaking Foundry Revenue
Lam Research achieved a record quarter for foundry revenues, demonstrating solid product momentum and leading-edge technology inflections. Foundry represented 48% of systems revenue, up from 35% in the previous quarter.
Gross Margin and Operating Margin Excellence
The highest quarterly gross margin percentage since Lam merged with Novelis in 2012 was achieved at 49%, and the operating margin reached 32.8%, both exceeding previous records.
Strong Performance in Data Center and Logic Segments
Significant gains in deposition and etch intensity due to semiconductor device complexity were noted. The ACARA system solidified its market-leading position in conductor etch.
Innovative Product Developments and Customer Wins
Lam's atomic layer deposition (ALD) products and the Altus Halo system have secured multiple key wins for spacer applications and increased adoption across leading 3D NAND customers.
Customer Support Business Group Achievements
The Customer Support Business Group generated approximately $1.7 billion in revenue for the March quarter, a 21% increase from the same period in 2024.
Negative Updates
Decreased Memory Systems Revenue
Memory systems revenue was 43% of total systems revenue, a decrease from 50% in the prior quarter, with non-volatile memory accounting for 20%, down from 24%.
China Revenue Challenges
China region accounted for 31% of revenue, flat from the prior quarter, with restrictions affecting shipments to a domestic China customer classified as a non-volatile memory producer.
Deferred Revenue and Advanced Payments
The deferred revenue balance remained flat at $2 billion, with advanced payments trending lower.
Potential Impact of Tariffs
The ongoing tariff and global economic environment presents dynamic challenges, with potential impacts on customer demand and supply chain operations.
Company Guidance
During the Lam Research March 2025 earnings call, the company reported strong financial results, with revenues reaching $4.72 billion, an 8% increase from the prior quarter. Gross margin was 49%, representing a record for the company since the Novelis merger, and operating margin was 32.8%. The guidance for the June quarter includes expected revenues of $5 billion, gross margin of 49.5%, and operating margin of 33.5%. Lam's strategic focus is on expanding its served market and gaining market share through key technology inflections such as Gate All Around and advanced packaging. The company is also seeing growth in its Customer Support Business Group (CSBG), particularly in upgrades, despite headwinds in the Reliant segment. The overall industry forecast for calendar year 2025 WFE spending remains in the $100 billion range, with Lam confident in its ability to outperform semiconductor industry growth.Lam Research Corporate Events
Shareholder Meetings
Lam Research Amends Bylaws for Shareholder Meetings
Neutral
May 21, 2025
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.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.