Lam Research (LRCX) to Report Q4 Earnings: What's in Store?

Lam Research Corporation LRCX is slated to report fourth-quarter fiscal 2020 results on Jul 29. In the last reported quarter, the company delivered a negative earnings surprise of 1%.

Lam Research’s surprise history has been decent. The company surpassed estimates in three out of the trailing four quarters and missed once, with the average surprise being 4.2%.

For the fiscal fourth quarter, the Zacks Consensus Estimate for earnings has increased 1% to $4.20 per share over the past 30 days. This indicates an increase of 16.02% from the year-ago reported figure.

The consensus mark for revenues is pegged at $2.73 billion, implying an increase of 15.5% from the year-ago reported figure.

Let’s see how things have shaped up for this announcement.

Factors to Note

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

The company provides advanced semiconductors and memory solutions that power 5G, artificial intelligence, as well as the Internet of Things. Rising demand for these solutions is expected to have aided top-line growth of the company.

In addition, it has been undertaking cost-reduction activities and density scaling for 3D NAND, as well as new memory technologies. It witnessed share gains in the foundry and logic segment. All these factors are likely to boost Lam Research’s upcoming results.

However, the company has been facing significant competition in all product and service categories in the semiconductor capital equipment market.

Also, volatility in the PC market is likely to have weighed on its performance. Weakness in PCs, which may offset expansion in 3D NAND, could affect fiscal fourth-quarter results.

Lam Research Corporation Price and EPS Surprise

Lam Research Corporation Price and EPS Surprise

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

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Lam Research this time around. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Earnings ESP: The company has an Earnings ESP of -8.31%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Lam Research has a Zacks Rank #3.

Stocks to Consider

Here are a few stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in the quarter to be reported.

NXP Semiconductors N.V. NXPI has an Earnings ESP of +11.90% and holds a Zacks Rank of 2.

Etsy, Inc. ETSY has an Earnings ESP of +10.98% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Intel Corporation INTC has an Earnings ESP of +3.13% and a Zacks Rank #2.

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

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