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What's in the Offing for Lam Research's (LRCX) Q2 Earnings?

Zacks Equity Research
·4-min read

Lam Research Corporation LRCX is scheduled to report fiscal second-quarter 2022 results on Jan 26.

For the fiscal second quarter, the company expects revenues of $4.4 billion (+/- $250 million). The Zacks Consensus Estimate for sales is pegged at $4.4 billion, indicating growth of 27.4% from the year-ago reported value.

Further, it anticipates non-GAAP earnings per share of $8.45 (+/- 50 cents) for second-quarter fiscal 2022. The consensus mark for earnings per share is pegged at $8.46, indicating a 40.3% rise from the previous-year reported figure. Further, the figure has been unchanged over the past 30 days.

It surpassed the Zacks Consensus Estimate in all the trailing four quarters, with the average being 7.84%.

Lam Research Corporation Price and EPS Surprise

Lam Research Corporation Price and EPS Surprise
Lam Research Corporation Price and EPS Surprise

Lam Research Corporation price-eps-surprise | Lam Research Corporation Quote

Factors to Consider

Lam Research has been witnessing improvement in memory and semiconductor equipment markets. Increased adoption rates for the 3D NAND technology, FinFETs and multi-patterning are expected to have aided its top-line growth.

Strong demand in key electronic categories, including PCs, storage and networking, owing to the growing work and learn-from-home trends, is expected to have continued benefiting the company in the quarter under review.

The growing proliferation of 5G, artificial intelligence and the Internet of Things is likely to have continued bolstering the adoption rate of Lam Research’s advanced semiconductor and memory solutions in the to-be-reported quarter.

The rolling out of an etch solution, namely Syndion GP, which expanded the company’s deep silicon etch capabilities, is expected to have contributed well. It is expected to have driven the company’s momentum across chipmakers as Syndion GP is well-equipped to support chipmakers in addressing the growing demand for next-generation power devices.

The growing adoption of DRAM and NAND, owing to the ongoing transition to a new data-enabled economy, is expected to have been a major tailwind.

Strengthening foundry-logic spending, including leading-edge nodes, is expected to have been a major tailwind for the company.

However, Lam Research has been facing significant competition in all product and service categories in the semiconductor capital equipment market. The impacts of this are likely to get reflected in the upcoming results.

Uncertainties due to the coronavirus outbreak are expected to have been major concerns. Additionally, headwinds related to foreign currency fluctuations are likely to have been overhangs.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Lam Research this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Lam Research currently has a Zacks Rank #2 and an Earnings ESP of -0.18%.

Stocks to Consider

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their soon-to-be-reported quarterly results.

Endava DAVA has an Earnings ESP of +1.70% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Endava is scheduled to release the second-quarter fiscal 2022 results on Feb 16. The Zacks Consensus Estimate for DAVA’s earnings is pegged at 59 cents per share, suggesting an increase of 55.3% from the prior-year reported figure.

Alphabet GOOGL has an Earnings ESP of +7.33% and a Zacks Rank #3 at present.

Alphabet is scheduled to release the fourth-quarter 2021 results on Feb 1. The Zacks Consensus Estimate for GOOGL’s earnings is pegged at $26.85 per share, which suggests an increase of 20.4% from the prior-year reported figure.

Monolithic Power Systems MPWR has an Earnings ESP of +2.83% and a Zacks Rank #2 at present.

Monolithic Power Systems is set to report the fourth-quarter 2021 results on Feb 3. The Zacks Consensus Estimate for MPWR’s earnings is pegged at $1.87 per share, which suggests an increase of 42.8% from the prior-year reported figure.


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