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Lam Research (LRCX) Outpaces Stock Market Gains: What You Should Know

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Lam Research (LRCX - Free Report) closed at $187.84 in the latest trading session, marking a +0.92% move from the prior day. This move outpaced the S&P 500's daily gain of 0.58%. Elsewhere, the Dow gained 0.28%, while the tech-heavy Nasdaq added 0.48%.

Heading into today, shares of the semiconductor equipment maker had gained 4.2% over the past month, outpacing the Computer and Technology sector's gain of 3.51% and the S&P 500's gain of 3.62% in that time.

LRCX will be looking to display strength as it nears its next earnings release. On that day, LRCX is projected to report earnings of $3.40 per share, which would represent a year-over-year decline of 35.97%. Our most recent consensus estimate is calling for quarterly revenue of $2.35 billion, down 24.82% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $14.33 per share and revenue of $9.64 billion, which would represent changes of -19.81% and -12.95%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for LRCX. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.01% higher. LRCX currently has a Zacks Rank of #3 (Hold).

In terms of valuation, LRCX is currently trading at a Forward P/E ratio of 12.99. This represents a discount compared to its industry's average Forward P/E of 15.02.

Also, we should mention that LRCX has a PEG ratio of 1.08. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Semiconductor Equipment - Wafer Fabrication industry currently had an average PEG ratio of 2.04 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 192, putting it in the bottom 25% 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.

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


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