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Lam Research (LRCX) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Lam Research (LRCX - Free Report) closed at $227.70, marking a -1.91% move from the previous day. This change lagged the S&P 500's 1.56% loss on the day. Meanwhile, the Dow lost 1.19%, and the Nasdaq, a tech-heavy index, lost 1.67%.

Heading into today, shares of the semiconductor equipment maker had gained 0.78% over the past month, outpacing the Computer and Technology sector's loss of 0.85% and the S&P 500's loss of 1.22% in that time.

Investors will be hoping for strength from LRCX as it approaches its next earnings release, which is expected to be October 23, 2019. The company is expected to report EPS of $3, down 10.71% from the prior-year quarter. 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 $13.61 per share and revenue of $9.28 billion. These totals would mark changes of -6.46% and -3.83%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for LRCX. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.01% higher. LRCX currently has a Zacks Rank of #3 (Hold).

Digging into valuation, LRCX currently has a Forward P/E ratio of 17.06. For comparison, its industry has an average Forward P/E of 24.13, which means LRCX is trading at a discount to the group.

We can also see that LRCX currently has a PEG ratio of 1.57. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Semiconductor Equipment - Wafer Fabrication stocks are, on average, holding a PEG ratio of 2.53 based on yesterday's closing prices.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 106, putting it in the top 42% 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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