Lam Research (LRCX) Outpaces Stock Market Gains: What You Should Know

In the latest trading session, Lam Research (LRCX) closed at $181.42, marking a +0.54% move from the previous day. This change outpaced the S&P 500's 0.3% gain on the day. At the same time, the Dow added 0.15%, and the tech-heavy Nasdaq gained 0.42%.

Coming into today, shares of the semiconductor equipment maker had lost 3.46% in the past month. In that same time, the Computer and Technology sector gained 0.55%, while the S&P 500 gained 2.2%.

LRCX will be looking to display strength as it nears its next earnings release. In that report, analysts expect LRCX to post earnings of $3.40 per share. This would mark a year-over-year decline of 35.97%. Our most recent consensus estimate is calling for quarterly revenue of $2.35 billion, down 24.82% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $14.33 per share and revenue of $9.64 billion, which would represent changes of -19.81% and -12.97%, respectively, from the prior year.

Any recent changes to analyst estimates for LRCX should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. LRCX is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, LRCX is currently trading at a Forward P/E ratio of 12.59. This valuation marks a discount compared to its industry's average Forward P/E of 14.22.

Investors should also note that LRCX has a PEG ratio of 1.05 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Semiconductor Equipment - Wafer Fabrication industry currently had an average PEG ratio of 1.39 as of yesterday's close.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 191, putting it in the bottom 26% 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.

To follow LRCX in the coming trading sessions, be sure to utilize Zacks.com.

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