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Lam Research (LRCX) Gains But Lags Market: What You Should Know

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In the latest trading session, Lam Research (LRCX - Free Report) closed at $464.30, marking a +1.24% move from the previous day. The stock lagged the S&P 500's daily gain of 1.29%. Meanwhile, the Dow gained 0.8%, and the Nasdaq, a tech-heavy index, added 10.96%.

Coming into today, shares of the semiconductor equipment maker had lost 3.64% in the past month. In that same time, the Computer and Technology sector lost 2%, while the S&P 500 lost 0.23%.

Investors will be hoping for strength from Lam Research as it approaches its next earnings release, which is expected to be January 25, 2023. In that report, analysts expect Lam Research to post earnings of $9.96 per share. This would mark year-over-year growth of 16.76%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.08 billion, up 20.25% from the year-ago period.

LRCX's full-year Zacks Consensus Estimates are calling for earnings of $34.61 per share and revenue of $18.13 billion. These results would represent year-over-year changes of +4.5% and +5.22%, respectively.

Investors might also notice recent changes to analyst estimates for Lam Research. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. The Zacks Consensus EPS estimate has moved 0.06% lower within the past month. Lam Research is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note Lam Research's current valuation metrics, including its Forward P/E ratio of 13.25. Its industry sports an average Forward P/E of 16.65, so we one might conclude that Lam Research is trading at a discount comparatively.

Investors should also note that LRCX has a PEG ratio of 1.87 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Semiconductor Equipment - Wafer Fabrication industry currently had an average PEG ratio of 1.87 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 39, putting it in the top 16% 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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