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

In the latest trading session, Lam Research (LRCX) closed at $498.35, marking a +0.26% move from the previous day. This move lagged the S&P 500's daily gain of 1.33%. Elsewhere, the Dow gained 1.14%, while the tech-heavy Nasdaq added 2.94%.

Heading into today, shares of the semiconductor equipment maker had gained 2.06% over the past month, lagging the Computer and Technology sector's gain of 8.77% and the S&P 500's gain of 6.11% in that time.

Lam Research will be looking to display strength as it nears its next earnings release, which is expected to be April 19, 2023. The company is expected to report EPS of $6.53, down 11.76% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $3.82 billion, down 5.86% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $33.30 per share and revenue of $17.64 billion. These totals would mark changes of +0.54% and +2.41%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Lam Research. 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.

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.

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. Lam Research is currently a Zacks Rank #3 (Hold).

Investors should also note Lam Research's current valuation metrics, including its Forward P/E ratio of 14.93. Its industry sports an average Forward P/E of 18.1, so we one might conclude that Lam Research is trading at a discount comparatively.

We can also see that LRCX currently has a PEG ratio of 8.58. 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 2.89 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 181, putting it in the bottom 29% 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.

To follow LRCX in the coming trading sessions, be sure to utilize

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