In the latest trading session, Lam Research (LRCX) closed at $426.15, marking a -0.21% move from the previous day. This move was narrower than the S&P 500’s daily loss of 0.88%. Meanwhile, the Dow lost 0.82%, and the Nasdaq, a tech-heavy index, added 0.08%.
Heading into today, shares of the semiconductor equipment maker had lost 15.57% over the past month, lagging the Computer and Technology sector’s loss of 7.53% and the S&P 500’s loss of 8.06% in that time.
Lam Research will be looking to display strength as it nears its next earnings release. On that day, Lam Research is projected to report earnings of $7.30 per share, which would represent a year-over-year decline of 9.77%. Our most recent consensus estimate is calling for quarterly revenue of $4.21 billion, up 1.53% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $31.59 per share and revenue of $16.8 billion, which would represent changes of +15.97% and +14.86%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Lam Research. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Lam Research is currently a Zacks Rank #4 (Sell).
Looking at its valuation, Lam Research is holding a Forward P/E ratio of 13.52. This valuation marks a discount compared to its industry’s average Forward P/E of 13.71.
It is also worth noting that LRCX currently has a PEG ratio of 0.87. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. LRCX’s industry had an average PEG ratio of 1.37 as of yesterday’s close.
The Semiconductor Equipment – Wafer Fabrication industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 238, which puts it in the bottom 6% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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