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Why Is Lam Research (LRCX) Up 9.8% Since Last Earnings Report?
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It has been about a month since the last earnings report for Lam Research (LRCX - Free Report) . Shares have added about 9.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Lam Research due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.
Lam Research reported fourth-quarter fiscal 2025 results, wherein both top and bottom lines surpassed the Zacks Consensus Estimate.
LRCX reported fourth-quarter non-GAAP earnings of $1.33 per share, which beat the Zacks Consensus Estimate by 10.8%. The bottom line increased 64.2% on a year-over-year basis.
In the fourth quarter of fiscal 2025, LRCX reported revenues of $5.17 billion, which surpassed the consensus mark by 3.6%. The top line increased 34% from the year-ago quarter’s $3.87 billion.
Buoyed by better-than-expected fiscal fourth-quarter performance, Lam Research has released a strong outlook for the first quarter of fiscal 2026.
LRCX’s Q4 Revenues in Detail
Lam Research’s Systems revenues were $3.44 billion (66.5% of total revenues), up 13% from the previous quarter and 58% year over year. Our model estimate for Systems revenues was pegged at $2.87 billion.
In the Customer Support Business Group, revenues were $1.73 billion, comprising 33.5% of total revenues. This marks a 2.9% increase from the previous quarter’s $1.68 billion, and a 1.9% increase from the year-ago period. Our model estimate for Customer Support Business Group revenues was pegged at $2.02 billion.
During the quarter, China contributed 35% of total revenues, Korea 22%, and Taiwan 19%. Other regions included Japan 14%, the United States 6%, Southeast Asia 2%, and Europe 2%.
Operating Details of LRCX
Lam Research’s non-GAAP gross margin rose to 50.3%, up 130 basis points from 49% in the previous quarter.
Non-GAAP operating expenses increased to $822.4 million, up 7.7% from $763.3 million. As a percentage of revenues, non-GAAP operating expenses declined to 15.9% from 16.2% in the third quarter.
As a result, the non-GAAP operating margin improved 160 basis points sequentially to 34.4%.
LRCX’s Balance Sheet & Cash Flow
As of June 29, 2025, Lam Research held $6.39 billion in cash and cash equivalents, up from $5.45 billion at the end of the prior quarter.
Cash flow from operating activities increased significantly to $2.55 billion, up from $1.31 billion in the previous quarter. In fiscal 2025, the company generated an operating cash flow of $6.17 billion.
During the quarter, Lam Research paid dividends totaling $295.2 million and repurchased shares worth $1.29 billion. During fiscal 2025, it repurchased shares worth $3.42 billion and paid $1.15 billion in dividends.
LRCX Provides Strong Guidance
For the first quarter of fiscal 2026, Lam Research projects revenues of $5.2 billion (+/- $300 million). The company expects a non-GAAP gross margin of 50% (+/-1%) and a non-GAAP operating margin of 34% (+/-1%). Non-GAAP earnings per share are projected to be $1.20 (+/- $0.10), with a diluted share count of 1.27 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 21.43% due to these changes.
VGM Scores
At this time, Lam Research has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a score of C on the value side, putting it in the middle 20% for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Lam Research has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Lam Research (LRCX) Up 9.8% Since Last Earnings Report?
It has been about a month since the last earnings report for Lam Research (LRCX - Free Report) . Shares have added about 9.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Lam Research due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.
Lam Research's Q4 Earnings Beat Expectations, Revenues Rise Y/Y
Lam Research reported fourth-quarter fiscal 2025 results, wherein both top and bottom lines surpassed the Zacks Consensus Estimate.
LRCX reported fourth-quarter non-GAAP earnings of $1.33 per share, which beat the Zacks Consensus Estimate by 10.8%. The bottom line increased 64.2% on a year-over-year basis.
In the fourth quarter of fiscal 2025, LRCX reported revenues of $5.17 billion, which surpassed the consensus mark by 3.6%. The top line increased 34% from the year-ago quarter’s $3.87 billion.
Buoyed by better-than-expected fiscal fourth-quarter performance, Lam Research has released a strong outlook for the first quarter of fiscal 2026.
LRCX’s Q4 Revenues in Detail
Lam Research’s Systems revenues were $3.44 billion (66.5% of total revenues), up 13% from the previous quarter and 58% year over year. Our model estimate for Systems revenues was pegged at $2.87 billion.
In the Customer Support Business Group, revenues were $1.73 billion, comprising 33.5% of total revenues. This marks a 2.9% increase from the previous quarter’s $1.68 billion, and a 1.9% increase from the year-ago period. Our model estimate for Customer Support Business Group revenues was pegged at $2.02 billion.
During the quarter, China contributed 35% of total revenues, Korea 22%, and Taiwan 19%. Other regions included Japan 14%, the United States 6%, Southeast Asia 2%, and Europe 2%.
Operating Details of LRCX
Lam Research’s non-GAAP gross margin rose to 50.3%, up 130 basis points from 49% in the previous quarter.
Non-GAAP operating expenses increased to $822.4 million, up 7.7% from $763.3 million. As a percentage of revenues, non-GAAP operating expenses declined to 15.9% from 16.2% in the third quarter.
As a result, the non-GAAP operating margin improved 160 basis points sequentially to 34.4%.
LRCX’s Balance Sheet & Cash Flow
As of June 29, 2025, Lam Research held $6.39 billion in cash and cash equivalents, up from $5.45 billion at the end of the prior quarter.
Cash flow from operating activities increased significantly to $2.55 billion, up from $1.31 billion in the previous quarter. In fiscal 2025, the company generated an operating cash flow of $6.17 billion.
During the quarter, Lam Research paid dividends totaling $295.2 million and repurchased shares worth $1.29 billion. During fiscal 2025, it repurchased shares worth $3.42 billion and paid $1.15 billion in dividends.
LRCX Provides Strong Guidance
For the first quarter of fiscal 2026, Lam Research projects revenues of $5.2 billion (+/- $300 million). The company expects a non-GAAP gross margin of 50% (+/-1%) and a non-GAAP operating margin of 34% (+/-1%). Non-GAAP earnings per share are projected to be $1.20 (+/- $0.10), with a diluted share count of 1.27 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 21.43% due to these changes.
VGM Scores
At this time, Lam Research has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a score of C on the value side, putting it in the middle 20% for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Lam Research has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.