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An Early Preview of Lam Research's (LRCX) Earnings Outlook
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Shares of Lam Research (LRCX - Free Report) sunk on Thursday as markets rebounded. But with the current overall turmoil, investors should focus more on the company’s quarterly earnings outlook than Lam’s recently fluctuating stock price.
Despite Lam’s recent downturn, shares are up nearly 58% over the last year. The wafer fabrication equipment company has consistently impressed investors with its ability to post solid earnings and strong sales.
Going forward, Lam’s products, which are essential to the semiconductor industry, will likely become even more valuable in the rapidly growing information age. In fact, CEO Martin Anstice said at a recent conference that “the fundamental future of Lam Research is inextricably linked to the rising importance of a data economy.”
With that said, let’s look to see if the Fremont, California-based firm will benefit from the proliferation of connected devices in its soon-to-be-reported quarter.
Latest Outlook
Lam’s quarterly revenues are expected to surge by 32.4% to reach 2.85 billion, based on our current Zacks Consensus Estimates. Meanwhile, the company is projected to see its quarterly earnings soar by 55.7% to hit $4.36 per share.
However, within the last 60 days, there has been zero earnings estimate revision activity for Lam’s upcoming quarter.
Valuation
LRCX’s Forward P/E of 12.2 currently marks a substantial discount to the “Semiconductor Equipment - Wafer Fabrication” industry average, which is trading at 15.9x forward earnings at the moment. Lam’s present valuation also marks a discount compared to the median Forward P/E of 13.8 it traded at over the last year.
Price Performance and Surprise History
Another important thing to consider ahead of LRCX’s upcoming financial report is the company’s history of earnings surprises and the effect that these surprises have had on share prices.
Lam Research Corporation Price, Consensus and EPS Surprise
We can see that Lam has posted strong results when it comes to topping earnings estimates over the last few of years. Investors should note that these earnings surprises don’t always lead to strong stock price momentum in the immediate aftermath of a report.
In fact, last quarter, shares of Lam plummeted after posting a 17.6% earnings surprise.
Bottom Line
Past performance is no indication of future success, and projecting becomes increasingly hard in a volatile market. With that said, it is worth remembering that both Lam’s top and bottom lines are expected to surge this quarter. Furthermore, Lam is currently a Zacks Rank #2 (Buy).
Lam is scheduled to report its March quarter 2018 financial results after market close on Tuesday, April 17.
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An Early Preview of Lam Research's (LRCX) Earnings Outlook
Shares of Lam Research (LRCX - Free Report) sunk on Thursday as markets rebounded. But with the current overall turmoil, investors should focus more on the company’s quarterly earnings outlook than Lam’s recently fluctuating stock price.
Despite Lam’s recent downturn, shares are up nearly 58% over the last year. The wafer fabrication equipment company has consistently impressed investors with its ability to post solid earnings and strong sales.
Going forward, Lam’s products, which are essential to the semiconductor industry, will likely become even more valuable in the rapidly growing information age. In fact, CEO Martin Anstice said at a recent conference that “the fundamental future of Lam Research is inextricably linked to the rising importance of a data economy.”
With that said, let’s look to see if the Fremont, California-based firm will benefit from the proliferation of connected devices in its soon-to-be-reported quarter.
Latest Outlook
Lam’s quarterly revenues are expected to surge by 32.4% to reach 2.85 billion, based on our current Zacks Consensus Estimates. Meanwhile, the company is projected to see its quarterly earnings soar by 55.7% to hit $4.36 per share.
However, within the last 60 days, there has been zero earnings estimate revision activity for Lam’s upcoming quarter.
Valuation
LRCX’s Forward P/E of 12.2 currently marks a substantial discount to the “Semiconductor Equipment - Wafer Fabrication” industry average, which is trading at 15.9x forward earnings at the moment. Lam’s present valuation also marks a discount compared to the median Forward P/E of 13.8 it traded at over the last year.
Price Performance and Surprise History
Another important thing to consider ahead of LRCX’s upcoming financial report is the company’s history of earnings surprises and the effect that these surprises have had on share prices.
Lam Research Corporation Price, Consensus and EPS Surprise
Lam Research Corporation Price, Consensus and EPS Surprise | Lam Research Corporation Quote
We can see that Lam has posted strong results when it comes to topping earnings estimates over the last few of years. Investors should note that these earnings surprises don’t always lead to strong stock price momentum in the immediate aftermath of a report.
In fact, last quarter, shares of Lam plummeted after posting a 17.6% earnings surprise.
Bottom Line
Past performance is no indication of future success, and projecting becomes increasingly hard in a volatile market. With that said, it is worth remembering that both Lam’s top and bottom lines are expected to surge this quarter. Furthermore, Lam is currently a Zacks Rank #2 (Buy).
Lam is scheduled to report its March quarter 2018 financial results after market close on Tuesday, April 17.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>