Yahoo Finance Lam Research Corporation Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
It's been a good week for Lam Research Corporation (NASDAQ:LRCX) shareholders, because the company has just released its latest third-quarter results, and the shares gained 6.3% to US$925. The result was positive overall - although revenues of US$3.8b were in line with what the analysts predicted, Lam Research surprised by delivering a statutory profit of US$7.34 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for Lam Research
Following the latest results, Lam Research's 27 analysts are now forecasting revenues of US$17.7b in 2025. This would be a huge 24% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 26% to US$34.70. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$17.5b and earnings per share (EPS) of US$34.35 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.
The analysts reconfirmed their price target of US$973, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Lam Research analyst has a price target of US$1,200 per share, while the most pessimistic values it at US$680. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Lam Research's past performance and to peers in the same industry. It's clear from the latest estimates that Lam Research's rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 13% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% 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 important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share 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$973, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Lam Research analysts - going out to 2026, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 1 warning sign for Lam Research that you need to be mindful of.
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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.
