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

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In the latest trading session, Lam Research (LRCX) closed at $612.56, marking a +1.91% move from the previous day. This change outpaced the S&P 500's 1.21% gain on the day.

Heading into today, shares of the semiconductor equipment maker had gained 2.09% over the past month, outpacing the Computer and Technology sector's gain of 1.28% and the S&P 500's loss of 0.9% 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 $8.13, up 43.39% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.3 billion, up 35.46% from the prior-year quarter.

LRCX's full-year Zacks Consensus Estimates are calling for earnings of $33.45 per share and revenue of $17.62 billion. These results would represent year-over-year changes of +22.8% and +20.44%, respectively.

Investors might also notice recent changes to analyst estimates for LRCX. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. LRCX is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, LRCX is currently trading at a Forward P/E ratio of 17.97. This valuation marks a discount compared to its industry's average Forward P/E of 19.68.

We can also see that LRCX currently has a PEG ratio of 1.06. 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. Semiconductor Equipment - Wafer Fabrication stocks are, on average, holding a PEG ratio of 1.06 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 128, putting it in the top 50% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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