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Lam Research (LRCX) Outpaces Stock Market Gains: What You Should Know

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Lam Research (LRCX - Free Report) closed the most recent trading day at $182.21, moving +1.05% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.18%. At the same time, the Dow added 0.24%, and the tech-heavy Nasdaq gained 0.03%.

Prior to today's trading, shares of the semiconductor equipment maker had gained 28.89% over the past month. This has outpaced the Computer and Technology sector's gain of 5.62% and the S&P 500's gain of 4.28% in that time.

Wall Street will be looking for positivity from LRCX as it approaches its next earnings report date. In that report, analysts expect LRCX to post earnings of $3.38 per share. This would mark a year-over-year decline of 29.44%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.40 billion, down 16.92% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $13.90 per share and revenue of $9.58 billion. These totals would mark changes of -22.22% and -13.55%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for LRCX. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.09% lower. LRCX is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that LRCX has a Forward P/E ratio of 12.97 right now. For comparison, its industry has an average Forward P/E of 12.99, which means LRCX is trading at a discount to the group.

Investors should also note that LRCX has a PEG ratio of 1.08 right now. 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 was holding an average PEG ratio of 1.37 at yesterday's closing price.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 228, which puts it in the bottom 11% 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.

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


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