NasdaqGS:LRCX

Stock Analysis Report

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Executive Summary

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


Snowflake Analysis

Adequate balance sheet and fair value.


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

5.9%

LRCX

-0.1%

US Semiconductor

2.0%

US Market


1 Year Return

54.6%

LRCX

40.7%

US Semiconductor

7.1%

US Market

Return vs Industry: LRCX exceeded the US Semiconductor industry which returned 39.4% over the past year.

Return vs Market: LRCX exceeded the US Market which returned 4.6% over the past year.


Shareholder returns

LRCXIndustryMarket
7 Day5.9%-0.1%2.0%
30 Day5.4%7.0%6.0%
90 Day-5.9%7.3%-0.05%
1 Year57.9%54.6%43.4%40.7%9.5%7.1%
3 Year86.9%76.5%65.0%56.2%30.7%22.1%
5 Year263.4%232.8%140.9%118.1%55.6%38.0%

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?

25.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LRCX ($266.36) is trading below our estimate of fair value ($368.62)

Significantly Below Fair Value: LRCX is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: LRCX is good value based on its PE Ratio (18.5x) compared to the Semiconductor industry average (33.6x).

PE vs Market: LRCX is poor value based on its PE Ratio (18.5x) compared to the US market (15.1x).


Price to Earnings Growth Ratio

PEG Ratio: LRCX is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: LRCX is overvalued based on its PB Ratio (8.5x) compared to the US Semiconductor industry average (3x).


Next Steps

Future Growth

How is Lam Research forecast to perform in the next 1 to 3 years based on estimates from 22 analysts?

15.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LRCX's forecast earnings growth (15.7% per year) is above the savings rate (2.2%).

Earnings vs Market: LRCX's earnings (15.7% per year) are forecast to grow slower than the US market (21.6% per year).

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

Revenue vs Market: LRCX's revenue (11.2% per year) is forecast to grow faster than the US market (8.9% per year).

High Growth Revenue: LRCX's revenue (11.2% 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 (50.3%).


Next Steps

Past Performance

How has Lam Research performed over the past 5 years?

24.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LRCX has high quality earnings.

Growing Profit Margin: LRCX's current net profit margins (21.8%) are lower than last year (25.6%).


Past Earnings Growth Analysis

Earnings Trend: LRCX's earnings have grown significantly by 24.9% 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 (-21.6%) over the past year, making it difficult to compare to the Semiconductor industry average (-13.2%).


Return on Equity

High ROE: Whilst LRCX's Return on Equity (46.21%) is outstanding, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Lam Research's financial position?


Financial Position Analysis

Short Term Liabilities: LRCX's short term assets ($9.4B) exceed its short term liabilities ($2.1B).

Long Term Liabilities: LRCX's short term assets ($9.4B) exceed its long term liabilities ($6.3B).


Debt to Equity History and Analysis

Debt Level: LRCX's debt to equity ratio (112.6%) is considered high.

Reducing Debt: LRCX's debt to equity ratio has increased from 49.4% to 112.6% over the past 5 years.

Debt Coverage: LRCX's debt is well covered by operating cash flow (42.9%).

Interest Coverage: LRCX's interest payments on its debt are well covered by EBIT (40.6x coverage).


Balance Sheet


Next Steps

Dividend

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

1.67%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: LRCX's dividend (1.73%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.75%).

High Dividend: LRCX's dividend (1.73%) is low compared to the top 25% of dividend payers in the US market (4.71%).


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 (31.6%), 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 (24.3% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.3yrs

Average management tenure


CEO

Tim Archer (52yo)

1.42yrs

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 ($USD13.75M) is about average for companies of similar size in the US market ($USD11.74M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Timothy Archer
President1.42yrsUS$13.75m0.054% $21.5m
Douglas Bettinger
Executive VP7.17yrsUS$11.76m0.042% $16.6m
Richard Gottscho
Executive VP & CTO3yrsUS$3.54m0.027% $10.8m
Patrick Lord
Senior VP & GM of Customer Support Business Group3.42yrsUS$2.78m0.0092% $3.7m
Vahid Vahedi
Senior VP & GM of the Etch Business Unit2.25yrsUS$2.50m0.030% $12.2m
Seshasayee Varadarajan
Senior VP & GM of Deposition Business Unit2.25yrsUS$2.49m0.024% $9.5m
Robert Hawthorne
Chief Information Officer1.25yrsno datano data
Tina Correia
Corporate Vice President of ?Investor Relations? & Corporate?Finance1.67yrsno datano data
Ava Hahn
Senior VP & Chief Legal Officer0.33yrno datano data
Stacey MacNeil
Chief Communications Officerno datano datano data

2.3yrs

Average Tenure

52yo

Average Age

Experienced Management: LRCX's management team is considered experienced (2.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Timothy Archer
President1.42yrsUS$13.75m0.054% $21.5m
Michael Cannon
Independent Director9.25yrsUS$286.82k0.011% $4.4m
Eric Brandt
Independent Director9.67yrsUS$298.82k0.018% $7.2m
Lih Shyng L. Tsai
Independent Director3.67yrsUS$268.82k0.0034% $1.3m
Catherine Lego
Independent Director14.33yrsUS$323.99k0.035% $14.0m
Leslie Varon
Independent Director1yrno datano data
Youssef El-Mansy
Independent Director7.92yrsUS$309.85k0.013% $5.1m
Abhijit Talwalkar
Chairman of the Board0.50yrUS$321.32k0.0095% $3.8m
Bethany Mayer
Independent Director1yrno datano data
Sohail Ahmed
Independent Director0.92yrno datano data

2.5yrs

Average Tenure

61yo

Average Age

Experienced Board: LRCX's board of directors are not considered experienced ( 2.5 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

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$40.081b
  • Shares outstanding: 145.16m
  • 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
LARETLX (Eurotlx)YesCommon StockITEURMay 1984
LRCX *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNMay 1984
L1RC34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 4 REPR 1 SHS UNSPONBRBRLJan 2020

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 systems to deposit conformal films for tungsten metallization applications; SABRE electrochemical deposition product for copper damascene manufacturing; SOLA ultraviolet thermal processing products for film treatment; SPEED gapfill high-density plasma chemical vapor deposition (CVD) products; Striker single-wafer atomic layer deposition (ALD) products; and VECTOR plasma-enhanced CVD ALD products. It also provides Flex for dielectric etch applications; Kiyo for conductor etch applications; Syndion for through-silicon via etch applications; and Versys metal products for metal etch processes. In addition, the company offers Coronus bevel clean products to enhance die yield; Da Vinci, DV-Prime, EOS, and SP to address a range of wafer cleaning appplications; and Metryx mass metrology systems for high precision in-line mass measurement in semiconductor wafer manufacturing. The company was founded in 1980 and is headquartered in Fremont, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/05/28 04:21
End of Day Share Price2020/05/27 00:00
Earnings2020/03/29
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.