Lam Research (LRCX) Dips More Than Broader Markets: What You Should Know
In the latest trading session, Lam Research (LRCX) closed at $487.05, marking a -1.4% move from the previous day. This change lagged the S&P 500's daily loss of 0.7%. Elsewhere, the Dow lost 0.87%, while the tech-heavy Nasdaq added 2.77%.
Prior to today's trading, shares of the semiconductor equipment maker had lost 4.31% over the past month. This has lagged the Computer and Technology sector's loss of 2.73% and was narrower than the S&P 500's loss of 5.06% in that time.
Lam Research will be looking to display strength as it nears its next earnings release. On that day, Lam Research is projected to report earnings of $6.53 per share, which would represent a year-over-year decline of 11.76%. Meanwhile, our latest consensus estimate is calling for revenue of $3.82 billion, down 5.86% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $33.30 per share and revenue of $17.64 billion, which would represent changes of +0.54% and +2.41%, respectively, from the prior year.
Any recent changes to analyst estimates for Lam Research should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. The Zacks Consensus EPS estimate remained stagnant within the past month. Lam Research currently has a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Lam Research has a Forward P/E ratio of 14.83 right now. Its industry sports an average Forward P/E of 18.91, so we one might conclude that Lam Research is trading at a discount comparatively.
Also, we should mention that LRCX has a PEG ratio of 8.52. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Semiconductor Equipment - Wafer Fabrication industry currently had an average PEG ratio of 3.07 as of yesterday's close.
The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 223, which puts it in the bottom 12% 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.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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