NasdaqGS:LRCX

Stock Analysis Report

Executive Summary

Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits worldwide.

Snowflake

Proven track record with adequate balance sheet.


Similar Companies

Share Price & News

How has Lam Research's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LRCX's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

0.6%

LRCX

-0.9%

US Semiconductor

0.5%

US Market


1 Year Return

89.7%

LRCX

38.3%

US Semiconductor

16.1%

US Market

Return vs Industry: LRCX exceeded the US Semiconductor industry which returned 38.3% over the past year.

Return vs Market: LRCX exceeded the US Market which returned 16.1% over the past year.


Shareholder returns

LRCXIndustryMarket
7 Day0.6%-0.9%0.5%
30 Day15.0%5.9%3.9%
90 Day30.3%13.1%6.6%
1 Year94.2%89.7%41.1%38.3%18.7%16.1%
3 Year170.8%156.3%81.8%71.5%47.2%37.7%
5 Year262.0%233.5%129.1%107.0%61.5%43.7%

Price Volatility Vs. Market

How volatile is Lam Research's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Lam Research undervalued compared to its fair value and its price relative to the market?

19.33x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: LRCX ($274.13) is trading above our estimate of fair value ($192.67)

Significantly Below Fair Value: LRCX is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: LRCX is good value based on its PE Ratio (19.3x) compared to the Semiconductor industry average (29.7x).

PE vs Market: LRCX is poor value based on its PE Ratio (19.3x) compared to the US market (18x).


Price to Earnings Growth Ratio

PEG Ratio: LRCX is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: LRCX is overvalued based on its PB Ratio (8x) compared to the US Semiconductor industry average (2.9x).


Next Steps

Future Growth

How is Lam Research forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?

13.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LRCX's forecast earnings growth (13.3% per year) is above the savings rate (2.7%).

Earnings vs Market: LRCX's earnings (13.3% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: LRCX's earnings are forecast to grow, but not significantly.

Revenue vs Market: LRCX's revenue (9.6% per year) is forecast to grow faster than the US market (7.3% per year).

High Growth Revenue: LRCX's revenue (9.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LRCX's Return on Equity is forecast to be very high in 3 years time (50.2%).


Next Steps

Past Performance

How has Lam Research performed over the past 5 years?

29.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LRCX has high quality earnings.

Growing Profit Margin: LRCX's current net profit margins (22.4%) are higher than last year (21.6%).


Past Earnings Growth Analysis

Earnings Trend: LRCX's earnings have grown significantly by 29.6% per year over the past 5 years.

Accelerating Growth: LRCX's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: LRCX had negative earnings growth (-10.1%) over the past year, making it difficult to compare to the Semiconductor industry average (-14.2%).


Return on Equity

High ROE: LRCX's Return on Equity (43%) is considered outstanding.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Lam Research's financial position?


Financial Position Analysis

Short Term Liabilities: LRCX's short term assets ($8.8B) exceeds its short term liabilities ($2.5B)

Long Term Liabilities: LRCX's short term assets ($8.8B) exceeds its long term liabilities (4.9B)


Debt to Equity History and Analysis

Debt Level: LRCX's debt to equity ratio (89.5%) is considered high.

Reducing Debt: LRCX's debt to equity ratio has increased from 31% to 89.5% over the past 5 years.

Debt Coverage: LRCX's debt is well covered by operating cash flow (66.1%).

Interest Coverage: LRCX's interest payments on its debt are well covered by EBIT (86.6x coverage).


Balance Sheet

Inventory Level: LRCX has a high level of physical assets or inventory.

Debt Coverage by Assets: LRCX's debt is covered by short term assets (assets are 2x debt).


Next Steps

Dividend

What is Lam Research's current dividend yield, its reliability and sustainability?

1.68%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Lam Research before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company1.7%marketbottom25%1.4%markettop25%3.7%industryaverage2.0%forecastin3Years1.7%

Current dividend yield vs market & industry

Notable Dividend: LRCX's dividend (1.68%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: LRCX's dividend (1.68%) is low compared to the top 25% of dividend payers in the US market (3.65%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, LRCX has been paying a dividend for less than 10 years.

Growing Dividend: LRCX's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (31.4%), LRCX's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: LRCX's dividends in 3 years are forecast to be well covered by earnings (24.6% payout ratio).


Next Steps

Management

What is the CEO of Lam Research's salary, the management and board of directors tenure and is there insider trading?

1.8yrs

Average management tenure


CEO

Tim Archer (52yo)

0.9yrs

Tenure

US$13,745,109

Compensation

Mr. Timothy M. Archer, also known as Tim, has been President and Chief Executive Officer of Lam Research Corporation since January 24, 2018 and December 5, 2018 respectively. Mr. Archer has been Director o ...


CEO Compensation Analysis

Compensation vs Market: Tim's total compensation ($USD13.75M) is about average for companies of similar size in the US market ($USD11.01M).

Compensation vs Earnings: Tim's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

1.8yrs

Average Tenure

53yo

Average Age

Experienced Management: LRCX's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Age and Tenure

3.2yrs

Average Tenure

61yo

Average Age

Experienced Board: LRCX's board of directors are considered experienced (3.2 years average tenure).


Insider Trading

Insider Buying: LRCX insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$684,00804 Nov 19
Richard Gottscho
EntityIndividual
Role
Chief Technology Officer
Executive VP & CTO
Shares2,497
Max PriceUS$273.93
SellUS$654,58131 Oct 19
Richard Gottscho
EntityIndividual
Role
Chief Technology Officer
Executive VP & CTO
Shares2,371
Max PriceUS$276.08
SellUS$5,215,96230 Oct 19
Douglas Bettinger
EntityIndividual
Role
Chief Financial Officer
Executive VP
Shares18,693
Max PriceUS$282.14
SellUS$1,145,37509 Sep 19
Sarah O’Dowd
EntityIndividual
Role
Chief Legal Officer
Senior VP
Shares5,000
Max PriceUS$229.08
SellUS$1,244,28805 Mar 19
Kevin Jennings
EntityIndividual
Shares7,016
Max PriceUS$177.35
SellUS$354,61604 Feb 19
Christine Heckart
EntityIndividual
Shares2,050
Max PriceUS$172.98

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Sarah O’Dowd (69yo)

    Senior VP

    • Tenure: 11.2yrs
    • Compensation: US$2.44m
  • Gary Bultman (62yo)

    Senior Vice President of Corporate Development

    • Tenure: 1.6yrs
  • Doug Bettinger (52yo)

    Executive VP

    • Tenure: 6.7yrs
    • Compensation: US$11.76m
  • Tim Archer (52yo)

    President

    • Tenure: 0.9yrs
    • Compensation: US$13.75m
  • Pat Lord (53yo)

    Senior VP & GM of Customer Support Business Group

    • Tenure: 2.9yrs
    • Compensation: US$2.78m
  • Rick Gottscho (67yo)

    Executive VP & CTO

    • Tenure: 2.5yrs
    • Compensation: US$3.54m
  • Rob Hawthorne

    Chief Information Officer

    • Tenure: 0.8yrs
  • Vahid Vahedi (53yo)

    Senior VP & GM of the Etch Business Unit

    • Tenure: 1.8yrs
    • Compensation: US$2.50m
  • Sesha Varadarajan (44yo)

    Senior VP & GM of Deposition Business Unit

    • Tenure: 1.8yrs
    • Compensation: US$2.49m
  • Tina Correia

    Corporate Vice President of Investor Relations & Corporate Communications

    • Tenure: 1.2yrs

Board Members

  • Mike Cannon (66yo)

    Independent Director

    • Tenure: 8.8yrs
    • Compensation: US$286.82k
  • Eric Brandt (57yo)

    Independent Director

    • Tenure: 9.2yrs
    • Compensation: US$298.82k
  • Rick Tsai (68yo)

    Independent Director

    • Tenure: 3.2yrs
    • Compensation: US$268.82k
  • Cathy Lego (62yo)

    Independent Director

    • Tenure: 13.8yrs
    • Compensation: US$323.99k
  • Leslie Varon (62yo)

    Independent Director

    • Tenure: 0.5yrs
  • Youssef El-Mansy (74yo)

    Independent Director

    • Tenure: 7.4yrs
    • Compensation: US$309.85k
  • Abhi Talwalkar (55yo)

    Chairman of the Board

    • Tenure: 0yrs
    • Compensation: US$321.32k
  • Bethany Mayer (57yo)

    Independent Director

    • Tenure: 0.5yrs
  • Sohail Ahmed (60yo)

    Independent Director

    • Tenure: 0.4yrs
  • Tim Archer (52yo)

    President

    • Tenure: 0.9yrs
    • Compensation: US$13.75m

Company Information

Lam Research Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Lam Research Corporation
  • Ticker: LRCX
  • Exchange: NasdaqGS
  • Founded: 1980
  • Industry: Semiconductor Equipment
  • Sector: Semiconductors
  • Market Cap: US$39.770b
  • Shares outstanding: 145.08m
  • Website: https://www.lamresearch.com

Number of Employees


Location

  • Lam Research Corporation
  • 4650 Cushing Parkway
  • Fremont
  • California
  • 94538
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LRCXNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDMay 1984
LARDB (Deutsche Boerse AG)YesCommon StockDEEURMay 1984
LARXTRA (XETRA Trading Platform)YesCommon StockDEEURMay 1984
LRCXWBAG (Wiener Boerse AG)YesCommon StockATEURMay 1984
0JT5LSE (London Stock Exchange)YesCommon StockGBUSDMay 1984

Biography

Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits worldwide. The company offers ALTUS syst ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/20 23:39
End of Day Share Price2019/11/20 00:00
Earnings2019/09/29
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.