At US$482, Is Lam Research Corporation (NASDAQ:LRCX) Worth Looking At Closely?

By
Simply Wall St
Published
May 17, 2022
NasdaqGS:LRCX
Source: Shutterstock

Let's talk about the popular Lam Research Corporation (NASDAQ:LRCX). The company's shares saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$607 and falling to the lows of US$447. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Lam Research's current trading price of US$482 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Lam Research’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Lam Research

What is Lam Research worth?

Great news for investors – Lam Research is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $794.70, but it is currently trading at US$482 on the share market, meaning that there is still an opportunity to buy now. However, given that Lam Research’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Lam Research generate?

earnings-and-revenue-growth
NasdaqGS:LRCX Earnings and Revenue Growth May 16th 2022

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Lam Research's earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since LRCX is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on LRCX for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy LRCX. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

If you'd like to know more about Lam Research as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that Lam Research has 1 warning sign and it would be unwise to ignore this.

If you are no longer interested in Lam Research, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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