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Why Lam Research (LRCX) Outpaced the Stock Market Today

In the latest market close, Lam Research (LRCX) reached $965.04, with a +1.99% movement compared to the previous day. The stock's performance was ahead of the S&P 500's daily gain of 0.03%. At the same time, the Dow added 0.41%, and the tech-heavy Nasdaq gained 0.12%.

The semiconductor equipment maker's stock has climbed by 2.26% in the past month, exceeding the Computer and Technology sector's loss of 0.55% and the S&P 500's loss of 0.9%.

Investors will be eagerly watching for the performance of Lam Research in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on April 24, 2024. The company's earnings per share (EPS) are projected to be $7.23, reflecting a 3.43% increase from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.7 billion, down 4.31% from the year-ago period.

For the full year, the Zacks Consensus Estimates are projecting earnings of $28.90 per share and revenue of $14.71 billion, which would represent changes of -15.42% and -15.58%, respectively, from the prior year.

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It's also important for investors to be aware of any recent modifications to analyst estimates for Lam Research. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.06% higher. As of now, Lam Research holds a Zacks Rank of #3 (Hold).

Investors should also note Lam Research's current valuation metrics, including its Forward P/E ratio of 32.74. This indicates a premium in contrast to its industry's Forward P/E of 29.62.

Also, we should mention that LRCX has a PEG ratio of 3.43. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Semiconductor Equipment - Wafer Fabrication industry had an average PEG ratio of 2.88 as trading concluded yesterday.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 42, placing it within the top 17% of over 250 industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these 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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Lam Research Corporation (LRCX) : Free Stock Analysis Report

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