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Lam Research (LRCX) Gains But Lags Market: What You Should Know

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Lam Research (LRCX - Free Report) closed at $207.99 in the latest trading session, marking a +0.59% move from the prior day. This change lagged the S&P 500's 0.83% gain on the day. Meanwhile, the Dow gained 0.93%, and the Nasdaq, a tech-heavy index, added 0.9%.

Prior to today's trading, shares of the semiconductor equipment maker had lost 1.43% over the past month. This has was narrower than the Computer and Technology sector's loss of 2.06% and the S&P 500's loss of 2.38% in that time.

Wall Street will be looking for positivity from LRCX as it approaches its next earnings report date. On that day, LRCX is projected to report earnings of $3.04 per share, which would represent a year-over-year decline of 9.52%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.19 billion, down 6.13% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $13.57 per share and revenue of $9.28 billion. These totals would mark changes of -6.74% and -3.87%, 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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 has moved 5.92% lower. LRCX is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, LRCX currently has a Forward P/E ratio of 15.24. This represents a discount compared to its industry's average Forward P/E of 21.05.

Investors should also note that LRCX has a PEG ratio of 1.27 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. Semiconductor Equipment - Wafer Fabrication stocks are, on average, holding a PEG ratio of 2.2 based on yesterday's closing prices.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 188, which puts it in the bottom 27% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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