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Lam Research (LRCX) Dips More Than Broader Markets: What You Should Know

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Lam Research (LRCX - Free Report) closed the most recent trading day at $468.24, moving -1.62% from the previous trading session. This move lagged the S&P 500's daily loss of 0.61%. Meanwhile, the Dow lost 0.42%, and the Nasdaq, a tech-heavy index, added 0.17%.

Prior to today's trading, shares of the semiconductor equipment maker had lost 3.02% over the past month. This has lagged the Computer and Technology sector's gain of 0.89% and the S&P 500's gain of 0.89% in that time.

Lam Research will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $9.96, up 16.76% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.08 billion, up 20.25% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $34.49 per share and revenue of $18.13 billion, which would represent changes of +4.14% and +5.22%, 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 such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.42% lower. Lam Research is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note Lam Research's current valuation metrics, including its Forward P/E ratio of 13.8. This represents a discount compared to its industry's average Forward P/E of 15.52.

We can also see that LRCX currently has a PEG ratio of 1.95. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. LRCX's industry had an average PEG ratio of 1.87 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 93, which puts it in the top 37% 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 Zacks.com.


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