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Lam Research (LRCX) Hits 52-Week High on Solid Execution
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Shares of Lam Research Corporation (LRCX - Free Report) touched a new 52-week high of $84.75 on Jun 20, eventually closing at $84.28. The company returned 0.73% in the past one year and has added roughly 6.12% year to date. Average volume of shares traded over the last three months was approximately 2,534K.
What's Driving Lam Research?
Lam Research is a leading global provider of innovative wafer fabrication equipment and services to the semiconductor industry.
Lam Research’s various initiatives, such as the KLA-Tencor Corporation (KLAC - Free Report) acquisition, product enhancements, solid execution and decent fiscal third-quarter results are some of the catalysts driving the stock. The company continues to see strong success in the areas of device architecture, process flow and technology inflections.
In the fiscal third quarter, Lam Research delivered decent results with earnings outperforming our estimates. Lam delivered revenues and shipments above the midpoints of the guidance. Gross margin, operating income and non-GAAP EPS were above the high-end of the guided range.
Also, management provided strong guidance for the fourth quarter of fiscal 2016. The company expects revenues of approximately $1.525 billion (+/- $75 million) and shipments of roughly $1.575 billion (+/- $75 million). Earnings per share are projected at $1.63 (+/- 10 cents). The Zacks Consensus Estimate is pegged at $1.47 per share, so guidance was stronger than expected.
In addition, the KLA acquisition, which is expected to close in mid 2016, is also a big positive. The deal will further expand Lam Research’s market and customer base. Management expects the combined company to create an equipment powerhouse with a huge range of products, customer breadth and scale. The deal will contribute significantly to sustainable growth, generating cash and creating value.
Also, recently, Lam Research announced the pricing of senior notes aggregating $2.4 billion. Management stated that the net proceeds would be used to fund the potential acquisition of KLA and to prepay KLA-Tencor's outstanding term loans. The credit rating agency of Moody’s Corporation, Moody's Investors Service, also remained optimistic about the benefits from the acquisition of KLA-Tencor.
Moreover, Lam is strongly positioned to benefit from technology inflections in the memory market where it is a dominant player. Leading edge technology spending in the logic and foundry segments is also expected to accelerate in the back half of the calendar year.
Additionally, Lam Research delivered an average positive earnings surprise of 6.73% in the trailing four quarters backed by its robust business portfolio.
Lam Research currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks that are performing well at the current levels include Applied Materials Inc. (AMAT - Free Report) and Advanced Energy Industries, Inc. (AEIS - Free Report) . Each of these stocks carries a Zacks Rank #1 (Strong Buy).
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Lam Research (LRCX) Hits 52-Week High on Solid Execution
Shares of Lam Research Corporation (LRCX - Free Report) touched a new 52-week high of $84.75 on Jun 20, eventually closing at $84.28. The company returned 0.73% in the past one year and has added roughly 6.12% year to date. Average volume of shares traded over the last three months was approximately 2,534K.
What's Driving Lam Research?
Lam Research is a leading global provider of innovative wafer fabrication equipment and services to the semiconductor industry.
Lam Research’s various initiatives, such as the KLA-Tencor Corporation (KLAC - Free Report) acquisition, product enhancements, solid execution and decent fiscal third-quarter results are some of the catalysts driving the stock. The company continues to see strong success in the areas of device architecture, process flow and technology inflections.
In the fiscal third quarter, Lam Research delivered decent results with earnings outperforming our estimates. Lam delivered revenues and shipments above the midpoints of the guidance. Gross margin, operating income and non-GAAP EPS were above the high-end of the guided range.
LAM RESEARCH Price
LAM RESEARCH Price | LAM RESEARCH Quote
Also, management provided strong guidance for the fourth quarter of fiscal 2016. The company expects revenues of approximately $1.525 billion (+/- $75 million) and shipments of roughly $1.575 billion (+/- $75 million). Earnings per share are projected at $1.63 (+/- 10 cents). The Zacks Consensus Estimate is pegged at $1.47 per share, so guidance was stronger than expected.
In addition, the KLA acquisition, which is expected to close in mid 2016, is also a big positive. The deal will further expand Lam Research’s market and customer base. Management expects the combined company to create an equipment powerhouse with a huge range of products, customer breadth and scale. The deal will contribute significantly to sustainable growth, generating cash and creating value.
Also, recently, Lam Research announced the pricing of senior notes aggregating $2.4 billion. Management stated that the net proceeds would be used to fund the potential acquisition of KLA and to prepay KLA-Tencor's outstanding term loans. The credit rating agency of Moody’s Corporation, Moody's Investors Service, also remained optimistic about the benefits from the acquisition of KLA-Tencor.
Moreover, Lam is strongly positioned to benefit from technology inflections in the memory market where it is a dominant player. Leading edge technology spending in the logic and foundry segments is also expected to accelerate in the back half of the calendar year.
Additionally, Lam Research delivered an average positive earnings surprise of 6.73% in the trailing four quarters backed by its robust business portfolio.
Lam Research currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks that are performing well at the current levels include Applied Materials Inc. (AMAT - Free Report) and Advanced Energy Industries, Inc. (AEIS - Free Report) . Each of these stocks carries a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>