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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 $977.90, indicating a -0.48% change from the previous session's end. The stock's change was less than the S&P 500's daily loss of 0.14%. Meanwhile, the Dow lost 0.77%, and the Nasdaq, a tech-heavy index, added 0.17%.

Coming into today, shares of the semiconductor equipment maker had gained 4.05% in the past month. In that same time, the Computer and Technology sector gained 6.81%, while the S&P 500 gained 5.34%.

The upcoming earnings release of Lam Research will be of great interest to investors. The company is predicted to post an EPS of $7.23, indicating a 3.43% growth compared to the equivalent quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $3.71 billion, down 4.22% from the prior-year quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $28.88 per share and revenue of $14.72 billion. These totals would mark changes of -15.48% and -15.54%, respectively, from last year.

Investors should also take note of any recent adjustments to analyst estimates for Lam Research. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Within the past 30 days, our consensus EPS projection remained stagnant. At present, Lam Research boasts a Zacks Rank of #2 (Buy).

Looking at its valuation, Lam Research is holding a Forward P/E ratio of 34.02. This valuation marks a premium compared to its industry's average Forward P/E of 30.69.

Investors should also note that LRCX has a PEG ratio of 3.5 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Semiconductor Equipment - Wafer Fabrication was holding an average PEG ratio of 2.98 at yesterday's closing price.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 95, finds itself in the top 38% echelons 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.

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


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