Lam Research (LRCX) Dips More Than Broader Markets: What You Should Know

In the latest trading session, Lam Research (LRCX) closed at $638.74, marking a -0.74% move from the previous day. This change lagged the S&P 500's 0.54% loss on the day.

Prior to today's trading, shares of the semiconductor equipment maker had gained 10.03% over the past month. This has outpaced the Computer and Technology sector's gain of 6.51% and the S&P 500's gain of 1.91% in that time.

LRCX will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $7.53, up 57.53% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $4 billion, up 43.45% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $26.71 per share and revenue of $14.49 billion, which would represent changes of +67.46% and +44.23%, 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 such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Within the past 30 days, our consensus EPS projection has moved 0.01% higher. LRCX is holding a Zacks Rank of #1 (Strong Buy) right now.

Valuation is also important, so investors should note that LRCX has a Forward P/E ratio of 24.09 right now. This represents a premium compared to its industry's average Forward P/E of 22.67.

Also, we should mention that LRCX has a PEG ratio of 0.73. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Semiconductor Equipment - Wafer Fabrication stocks are, on average, holding a PEG ratio of 1.18 based on yesterday's closing prices.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 24, putting it in the top 10% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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