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Thursday, October 1, 2020

Lam Research Corporation (NASDAQ:LRCX) on the Path to Ruin

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The Lam Research Corporation (LRCX) shares are trading at lower $337.14 and the avg recommendation for the stock is Moderate Buy. while the current analyst price target stands at $316.22.

To add more color to this target, the company’s high over the last year is $344.32 and the low is $181.38. Over the last 52 weeks, LRCX is down -2.09% while the S&P 500 is down -0.87%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, LRCX reported a profit of $1.17 billion. Lam Research Corporation also saw revenues increase to $2.5 billion. In addition, LRCX has free cash flow of $1.16 billion as of 03-2020. The company’s EBITDA came in at $762.72 million which compares well with its peers.

LRCX booked profit margins of 21.80%, its Return on Equity (ROE) is 45.30%, and its Return on Assets is 17.00%. All told, it is clear that, LRCX needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. LRCX has a short ratio of 1.81 and outstanding shares of 145.30M.

Company Outlook

LRCX has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 1.35 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 13.90. Lam Research Corporation LRCX also noted assets of $12.94 billion at the end of the last quarter. Investors should also keep an eye on sector updates as LRCX has historically followed its peers on positive news.

All told, Lam Research Corporation LRCX has strung together solid data and demonstrated underlying fundamentals. At its current valuation, LRCX represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Lam Research Corporation LRCX is now commanding a market cap of 48.33B and a float of 144.72M. LRCX is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of LRCX stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in LRCX, either long or short, and we have not been compensated for this article.

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