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Why Lam Research (LRCX) Dipped More Than Broader Market Today

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Lam Research (LRCX - Free Report) closed the latest trading day at $752.02, indicating a -0.68% change from the previous session's end. The stock's performance was behind the S&P 500's daily loss of 0.15%. Elsewhere, the Dow lost 0.42%, while the tech-heavy Nasdaq added 0.09%.

The semiconductor equipment maker's shares have seen an increase of 2.93% over the last month, surpassing the Computer and Technology sector's gain of 1.19% and falling behind the S&P 500's gain of 3.5%.

The investment community will be closely monitoring the performance of Lam Research in its forthcoming earnings report. The company is scheduled to release its earnings on January 24, 2024. In that report, analysts expect Lam Research to post earnings of $7.05 per share. This would mark a year-over-year decline of 34.17%. At the same time, our most recent consensus estimate is projecting a revenue of $3.71 billion, reflecting a 29.72% fall from the equivalent quarter last year.

For the full year, the Zacks Consensus Estimates project earnings of $27.56 per share and a revenue of $14.62 billion, demonstrating changes of -19.34% and -16.13%, respectively, from the preceding year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Lam Research. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.33% lower. Lam Research currently has a Zacks Rank of #3 (Hold).

With respect to valuation, Lam Research is currently being traded at a Forward P/E ratio of 27.47. This indicates a premium in contrast to its industry's Forward P/E of 23.83.

It's also important to note that LRCX currently trades at a PEG ratio of 4.68. 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 had an average PEG ratio of 3.42 as trading concluded yesterday.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 52, placing it within the top 21% of over 250 industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained 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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