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

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Lam Research (LRCX - Free Report) closed the most recent trading day at $635.93, moving -0.21% from the previous trading session. This change lagged the S&P 500's 0.2% gain on the day.

Heading into today, shares of the semiconductor equipment maker had gained 2.09% over the past month, outpacing the Computer and Technology sector's gain of 1.57% and lagging the S&P 500's gain of 3.28% in that time.

Investors will be hoping for strength from LRCX as it approaches its next earnings release, which is expected to be July 28, 2021. In that report, analysts expect LRCX to post earnings of $7.53 per share. This would mark year-over-year growth of 57.53%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4 billion, up 43.45% from the year-ago period.

It is also important to note the recent changes to analyst estimates for LRCX. Recent revisions tend to reflect the latest near-term business trends. 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. 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.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. LRCX currently has a Zacks Rank of #3 (Hold).

In terms of valuation, LRCX is currently trading at a Forward P/E ratio of 19.66. Its industry sports an average Forward P/E of 20.37, so we one might conclude that LRCX is trading at a discount comparatively.

Investors should also note that LRCX has a PEG ratio of 0.6 right now. 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 1.17 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 216, putting it in the bottom 15% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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