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Here's Why Lam Research (LRCX) Fell More Than Broader Market

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Lam Research (LRCX - Free Report) closed the latest trading day at $959.69, indicating a -1.78% change from the previous session's end. This move lagged the S&P 500's daily loss of 0.16%. Meanwhile, the Dow lost 0.14%, and the Nasdaq, a tech-heavy index, lost 0.06%.

The the stock of semiconductor equipment maker has fallen by 4.62% in the past month, lagging the Computer and Technology sector's gain of 0.47% and the S&P 500's gain of 1.96%.

The investment community will be closely monitoring the performance of Lam Research in its forthcoming earnings report. The company is scheduled to release its earnings on July 31, 2024. The company's earnings per share (EPS) are projected to be $7.52, reflecting a 25.75% increase from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.81 billion, up 18.91% from the year-ago period.

It is also important to note the recent changes to analyst estimates for Lam Research. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.12% lower. Lam Research currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Lam Research is currently trading at a Forward P/E ratio of 27.72. This denotes a discount relative to the industry's average Forward P/E of 31.09.

One should further note that LRCX currently holds a PEG ratio of 2.82. 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. By the end of yesterday's trading, the Semiconductor Equipment - Wafer Fabrication industry had an average PEG ratio of 2.81.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 201, this industry ranks in the bottom 21% of all industries, numbering over 250.

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.

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


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