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

Lam Research (LRCX) ended the recent trading session at $928.50, demonstrating a -1.68% swing from the preceding day's closing price. The stock's change was less than the S&P 500's daily gain of 0.04%. Meanwhile, the Dow experienced a rise of 0.16%, and the technology-dominated Nasdaq saw a decrease of 0.28%.

Prior to today's trading, shares of the semiconductor equipment maker had gained 9.1% over the past month. This has outpaced the Computer and Technology sector's gain of 4.78% and the S&P 500's gain of 5.01% in that time.

Market participants will be closely following the financial results of Lam Research in its upcoming release. On that day, Lam Research is projected to report earnings of $7.23 per share, which would represent year-over-year growth of 3.43%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.71 billion, down 4.22% from the year-ago period.

LRCX's full-year Zacks Consensus Estimates are calling for earnings of $28.88 per share and revenue of $14.72 billion. These results would represent year-over-year changes of -15.48% and -15.54%, respectively.

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It's also important for investors to be aware of any recent modifications 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.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 4.27% higher within the past month. At present, Lam Research boasts a Zacks Rank of #2 (Buy).

Investors should also note Lam Research's current valuation metrics, including its Forward P/E ratio of 32.69. For comparison, its industry has an average Forward P/E of 29.13, which means Lam Research is trading at a premium to the group.

One should further note that LRCX currently holds a PEG ratio of 3.36. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. By the end of yesterday's trading, the Semiconductor Equipment - Wafer Fabrication industry had an average PEG ratio of 2.82.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 19, placing it within the top 8% of over 250 industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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Lam Research Corporation (LRCX) : Free Stock Analysis Report

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