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

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Lam Research (LRCX - Free Report) closed at $619.86 in the latest trading session, marking a +0.51% move from the prior day. This move lagged the S&P 500's daily gain of 0.99%.

Prior to today's trading, shares of the semiconductor equipment maker had gained 19.85% over the past month. This has outpaced the Computer and Technology sector's gain of 8.96% and the S&P 500's gain of 0.42% in that time.

Lam Research will be looking to display strength as it nears its next earnings release. In that report, analysts expect Lam Research to post earnings of $5.03 per share. This would mark a year-over-year decline of 43.04%. Our most recent consensus estimate is calling for quarterly revenue of $3.12 billion, down 32.73% from the year-ago period.

LRCX's full-year Zacks Consensus Estimates are calling for earnings of $33.19 per share and revenue of $17.37 billion. These results would represent year-over-year changes of +0.21% and +0.81%, respectively.

Investors should also note any recent changes to analyst estimates for Lam Research. 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. The Zacks Consensus EPS estimate has moved 0.07% higher within the past month. Lam Research is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, Lam Research is holding a Forward P/E ratio of 18.58. This valuation marks a discount compared to its industry's average Forward P/E of 19.57.

Investors should also note that LRCX has a PEG ratio of 7.26 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. The Semiconductor Equipment - Wafer Fabrication was holding an average PEG ratio of 3.4 at yesterday's closing price.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 121, putting it in the top 49% 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.

To follow LRCX in the coming trading sessions, be sure to utilize Zacks.com.


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