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Lam Research (LRCX)
NASDAQ:LRCX
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Lam Research
(NASDAQ:LRCX)
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Rating:82Outperform
Price Target:
$122.00
▼(-7.13% Downside)
Lam Research's strong financial performance and positive earnings call are the most significant factors driving the score. The company's robust revenue growth, effective cost management, and technological advancements position it well in the semiconductor industry. Technical analysis supports a bullish trend, while valuation is moderate. Despite some challenges, the overall outlook remains positive.
Positive Factors
Revenue Growth
Record revenue growth indicates strong market demand and effective sales strategies, reinforcing Lam Research's competitive position in the semiconductor industry.
Technological Advancements
Technological leadership with innovations like Dextro cobots enhances operational efficiency and strengthens Lam's market position as a leader in semiconductor manufacturing technology.
Cash Flow Generation
Strong cash flow generation supports financial flexibility and investment capacity, enabling Lam Research to sustain growth and navigate industry cycles effectively.
Negative Factors
DRAM Revenue Decline
A decline in DRAM revenue indicates potential challenges in specific market segments, which could impact overall revenue diversification and growth prospects.
Projected Revenue Decline
Anticipated revenue decline suggests potential short-term challenges in market demand and pricing, which could affect financial performance and investor confidence.
Higher Tariffs Impact
Higher tariffs can increase costs and reduce competitiveness, potentially impacting profitability and market share in affected regions over the medium term.
Lam Research (LRCX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$165.66B
Dividend Yield0.72%
Average Volume (3M)11.91M
Price to Earnings (P/E)31.6
Beta (1Y)2.03
Revenue Growth23.68%
EPS Growth43.16%
CountryUS
Employees18,600
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)1.33
Shares Outstanding1,261,032,300
10 Day Avg. Volume13,059,483
30 Day Avg. Volume11,905,569
Financial Highlights & Ratios
PEG Ratio0.54
Price to Book (P/B)12.69
Price to Sales (P/S)6.79
P/FCF Ratio23.12
Enterprise Value/Market Cap0.74
Enterprise Value/Revenue6.64
Enterprise Value/Gross Profit13.64
Enterprise Value/Ebitda18.90
Forecast
1Y Price Target
$127.36Price Target Upside-3.05% Downside
Rating ConsensusStrong Buy
Number of Analyst Covering26
Lam Research Business Overview & Revenue Model
Company DescriptionLam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. The company offers ALTUS systems to deposit conformal films for tungsten metallization applications; SABRE electrochemical deposition products for copper interconnect transition that offers copper damascene manufacturing; SOLA ultraviolet thermal processing products for film treatments; and VECTOR plasma-enhanced CVD ALD products. It also provides SPEED gapfill high-density plasma chemical vapor deposition products; and Striker single-wafer atomic layer deposition products for dielectric film solutions. In addition, the company offers Flex for dielectric etch applications; Kiyo for conductor etch applications; Syndion for through-silicon via etch applications; and Versys metal products for metal etch processes. Further, it provides Coronus bevel clean products to enhance die yield; Da Vinci, DV-Prime, EOS, and SP series products to address various wafer cleaning applications; and Metryx mass metrology systems for high precision in-line mass measurement in semiconductor wafer manufacturing. The company sells its products and services to semiconductors industry in the United States, China, Europe, Japan, Korea, Southeast Asia, Taiwan, and internationally. Lam Research Corporation was incorporated in 1980 and is headquartered in Fremont, California.
How the Company Makes MoneyLam Research generates revenue primarily through the sale of its semiconductor manufacturing equipment, which includes systems for etching, deposition, and cleaning wafers, as well as related services and parts. The company earns significant income from both new equipment sales and the ongoing service and support of its installed systems, which are essential for maintaining the performance and efficiency of semiconductor production lines. Key revenue streams include system sales, service revenue from maintenance contracts, and aftermarket sales of consumables and spare parts. Strategic partnerships with major semiconductor manufacturers further enhance its market presence and contribute to its earnings, as these collaborations enable Lam Research to tailor its solutions to meet the evolving needs of its customers in a competitive landscape.
Lam Research Key Performance Indicators (KPIs)
Any
Revenue by Segment
Analyzes revenue from different business segments, highlighting which areas drive growth and profitability, and indicating where the company might focus future investments or face challenges.
Analyzes revenue from different business segments, highlighting which areas drive growth and profitability, and indicating where the company might focus future investments or face challenges.
Data provided by:
Main Street Data
Main Street DataLam Research Earnings Call Summary
Earnings Call Date:Jul 30, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements in revenue growth, strong performance in the foundry segment, and technological advancements in advanced services. However, there were challenges such as a decline in DRAM revenue and an anticipated revenue decline in the December quarter due to mix and tariffs. Despite these challenges, the positive aspects of strong financial performance and technological leadership outweigh the negatives.Q4-2025 Updates
Positive Updates
Record-Breaking Revenue and Growth
Lam Research achieved record revenue of $18.4 billion for the fiscal year 2025, with quarterly revenue reaching $5.17 billion, a 10% increase from the prior quarter. Gross margin reached a record 50.3%, the highest since the merger with Novellus.
Strong Performance in Foundry Segment
The foundry segment represented 52% of systems revenue, marking a second consecutive record quarter. Revenue from mature nodes and leading-edge processes drove this growth.
Impressive Upgrades Business Growth
The upgrades business reached a new high, with a mid-teens percentage increase over the prior quarter, driven by NAND technology conversions and customer migrations to higher layer count devices.
Advanced Services and Technology Leadership
Lam's advanced services, including the Dextro cobots, are realizing the vision of an autonomous fab, leading to enhanced tool-to-tool matching and improved machine availability.
Negative Updates
DRAM Revenue Decline
DRAM revenue declined to 14% of systems revenue, compared to 23% in the previous quarter, due to the timing of certain customer projects.
Projected Revenue Decline in December Quarter
Revenue is expected to decline in the December quarter, mirroring WFE trends and driven by a less favorable mix and higher tariffs.
Company Guidance
During the earnings call for the June 2025 quarter, Lam Research provided guidance for the upcoming September 2025 quarter, highlighting several key metrics and expectations. The company reported revenues of $5.17 billion for the June quarter, which marked an increase of 10% from the previous quarter, with a gross margin of 50.3%. They achieved a record revenue for the fiscal year 2025 at $18.4 billion and a gross margin of 48.8%. For the September 2025 quarter, Lam Research anticipates revenue of $5.2 billion, plus or minus $300 million, and expects gross margins to remain around 50%, plus or minus 1 percentage point. Earnings per share are projected at $1.20, plus or minus $0.10, with a share count of approximately 1.27 billion shares. Additionally, the company forecasted wafer fabrication equipment (WFE) spending for the calendar year 2025 to be around $105 billion, up from the previous estimate of $100 billion, primarily due to increased domestic China-related spending.Lam Research Financial Statement Overview
Summary
Lam Research exhibits excellent financial health with strong revenue and profit growth, effective cost management, and robust cash flow generation. The balance sheet is healthy with manageable debt levels and strong equity, highlighting the company's strong position in the semiconductor industry.Income Statement
Lam Research demonstrates strong revenue and profit growth, with Total Revenue increasing from $14.9B in 2024 to $18.4B in 2025, marking a 23.7% growth rate. Gross Profit Margin remains robust at approximately 48.7% for 2025. The Net Profit Margin improved to 29.1% in 2025 from 25.7% in 2024, indicating enhanced profitability. The EBIT and EBITDA margins are also high at 32% for 2025, reflecting efficient cost management and operational effectiveness.88
Very Positive
Balance Sheet
The company maintains a healthy Debt-to-Equity ratio of 0.45 in 2025, showing prudent leverage management. Return on Equity (ROE) is impressive at 54.3%, indicating effective utilization of equity capital to generate profits. The Equity Ratio stands at 46.2%, suggesting a strong equity base supporting the company's asset structure.85
Very Positive
Cash Flow
Lam Research's Cash Flow is robust, with Operating Cash Flow increasing significantly by 32.7% from 2024 to 2025. The Free Cash Flow also shows strong growth, improving by 45% in the same period. The Operating Cash Flow to Net Income Ratio is above 1, suggesting efficient conversion of earnings to cash. The Free Cash Flow to Net Income Ratio is also favorable, indicating strong cash generation capabilities relative to net income.90
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2020 | Dec 2019 | Dec 2018 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 18.44B | 18.44B | 14.91B | 10.04B | 9.65B | 11.08B |
| Gross Profit | 8.98B | 8.98B | 7.05B | 4.61B | 4.36B | 5.17B |
| EBITDA | 6.48B | 6.34B | 4.91B | 3.02B | 2.87B | 3.54B |
| Net Income | 5.36B | 5.36B | 3.83B | 2.25B | 2.19B | 2.38B |
Balance Sheet | ||||||
| Total Assets | 21.35B | 21.35B | 18.74B | 14.56B | 12.00B | 12.48B |
| Cash, Cash Equivalents and Short-Term Investments | 6.39B | 6.39B | 5.85B | 6.71B | 5.43B | 4.95B |
| Total Debt | 4.48B | 4.48B | 4.98B | 5.81B | 4.49B | 2.42B |
| Total Liabilities | 11.48B | 11.48B | 10.21B | 9.38B | 7.28B | 5.90B |
| Stockholders Equity | 9.86B | 9.86B | 8.54B | 5.18B | 4.72B | 6.58B |
Cash Flow | ||||||
| Free Cash Flow | 5.71B | 5.41B | 4.26B | 1.92B | 2.87B | 2.38B |
| Operating Cash Flow | 6.17B | 6.17B | 4.65B | 2.13B | 3.18B | 2.66B |
| Investing Cash Flow | -708.09M | -708.09M | -370.61M | -244.08M | -1.64B | 2.75B |
| Financing Cash Flow | -4.94B | -4.94B | -4.00B | -623.93M | -2.39B | -3.27B |
Lam Research Technical Analysis
Neutral
131.37
Price Trends
114.57
Positive
103.76
Positive
89.66
Positive
Market Momentum
7.95
Positive
53.09
Neutral
35.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LRCX, the sentiment is Neutral. The current price of 131.37 is below the 20-day moving average (MA) of 133.35, above the 50-day MA of 114.57, and above the 200-day MA of 89.66, indicating a neutral trend. The MACD of 7.95 indicates Positive momentum. The RSI at 53.09 is Neutral, neither overbought nor oversold. The STOCH value of 35.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LRCX.
Lam Research Risk Analysis
Lam Research disclosed 30 risk factors in its most recent earnings report. Lam Research reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Lam Research Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $165.66B | 31.63 | 58.24% | 0.72% | 23.68% | 43.16% | |
81 Outperform | $361.21B | 35.85 | 56.14% | 0.72% | 27.09% | 40.94% | |
80 Outperform | $129.69B | 32.36 | 100.78% | 0.73% | 24.04% | 49.69% | |
76 Outperform | $167.26B | 25.03 | 35.64% | 0.82% | 6.70% | -5.95% | |
72 Outperform | $348.75B | 123.70 | 4.70% | ― | 27.17% | 108.67% | |
63 Neutral | $169.86B | ― | -19.24% | 0.34% | -3.72% | -2120.70% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
LRCX
Lam Research
131.37
46.57
54.92%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.