Technology

Lam Research (LRCX) Gains But Lags Market: What You Should Know

In the latest trading session, Lam Research (LRCX) closed at $190.84, marking a +0.2% move from the previous day. The stock lagged the S&P 500's daily gain of 0.35%. Meanwhile, the Dow gained 0.03%, and the Nasdaq, a tech-heavy index, added 0.7%.

Prior to today's trading, shares of the semiconductor equipment maker had gained 10.69% over the past month. This has outpaced the Computer and Technology sector's gain of 6.69% and the S&P 500's gain of 5.14% in that time.

Investors will be hoping for strength from LRCX as it approaches its next earnings release, which is expected to be April 24, 2019. In that report, analysts expect LRCX to post earnings of $3.38 per share. This would mark a year-over-year decline of 29.44%. Meanwhile, our latest consensus estimate is calling for revenue of $2.40 billion, down 16.92% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $13.89 per share and revenue of $9.57 billion. These totals would mark changes of -22.27% and -13.58%, respectively, from last year.

Any recent changes to analyst estimates for LRCX should also be noted by investors. 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.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. LRCX is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that LRCX has a Forward P/E ratio of 13.71 right now. For comparison, its industry has an average Forward P/E of 14.48, which means LRCX is trading at a discount to the group.

Meanwhile, LRCX's PEG ratio is currently 1.14. 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 was holding an average PEG ratio of 1.44 at yesterday's closing price.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 199, putting it in the bottom 22% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


Click to get this free report

Lam Research Corporation (LRCX): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.