The Lam Research Corporation (NASDAQ:LRCX) Full-Year Results Are Out And Analysts Have Published New Forecasts

Last week, you might have seen that Lam Research Corporation (NASDAQ:LRCX) released its annual result to the market. The early response was not positive, with shares down 6.1% to US$830 in the past week. Results were roughly in line with estimates, with revenues of US$15b and statutory earnings per share of US$29.00. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Lam Research

Taking into account the latest results, the consensus forecast from Lam Research's 25 analysts is for revenues of US$17.6b in 2025. This reflects a solid 18% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 19% to US$34.97. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$17.7b and earnings per share (EPS) of US$35.24 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of US$1,056, suggesting that the company has met expectations in its recent result. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Lam Research, with the most bullish analyst valuing it at US$1,325 and the most bearish at US$830 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Lam Research's rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 11% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. Lam Research is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$1,056, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Lam Research. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Lam Research analysts - going out to 2027, and you can see them free on our platform here.

You can also see our analysis of Lam Research's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com