Lam Research (LRCX) Exceeds Market Returns: Some Facts to Consider

Lam Research (LRCX) closed at $98.83 in the latest trading session, marking a +2.09% move from the prior day. The stock outperformed the S&P 500, which registered a daily gain of 0.48%. Elsewhere, the Dow lost 0.02%, while the tech-heavy Nasdaq added 0.94%.

Shares of the semiconductor equipment maker have appreciated by 15.72% over the course of the past month, outperforming the Computer and Technology sector's gain of 7.61%, and the S&P 500's gain of 5.13%.

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Investors will be eagerly watching for the performance of Lam Research in its upcoming earnings disclosure. The company's upcoming EPS is projected at $1.2, signifying a 48.15% increase compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $4.99 billion, up 28.89% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $4 per share and a revenue of $18.22 billion, representing changes of +33.78% and 0%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Lam Research. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. The Zacks Consensus EPS estimate has moved 0.85% higher within the past month. Lam Research currently has a Zacks Rank of #3 (Hold).

From a valuation perspective, Lam Research is currently exchanging hands at a Forward P/E ratio of 24.22. This valuation marks a discount compared to its industry average Forward P/E of 27.35.

We can additionally observe that LRCX currently boasts a PEG ratio of 1.37. 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. By the end of yesterday's trading, the Electronics - Semiconductors industry had an average PEG ratio of 1.59.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 91, which puts it in the top 37% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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