LRCXLRCX
US • TECHNOLOGY
$433.33
P/E
81.79
PEG
2.00
FCF Yield
1.3%
Rev Growth YoY
+23.8% YoY
Gross Margin
50.0%
Health Score
8/10
D/E Ratio
0.45
Confidence
MEDIUM
Business Snapshot
This company, Lam Research (LRCX), is a leading provider of semiconductor wafer fabrication equipment and services, primarily focused on etch, deposition, and clean technologies used in chip manufacturing. It operates in the highly cyclical and capital-intensive semiconductor equipment market, where it holds a strong competitive position as one of the top players alongside Applied Materials and Tokyo Electron. With a market capitalisation of $474.08 billion, LRCX is a large-cap stock generating $21.68 billion in trailing twelve-month revenue, reflecting significant financial scale within the industry. A defining characteristic of the company is its exposure to leading-edge chip manufacturing, where technological complexity creates high barriers to entry and customer switching costs.
Financial Health
Gross margin stands at 50.0% with a net margin (TTM) of 30.9%, indicating strong pricing power and operational efficiency, though prior-year comparisons for gross margin are unavailable. The balance sheet is healthy, with a debt-to-equity ratio of 0.45x and a current ratio of 2.21x, reflecting conservative leverage and ample short-term liquidity...
Risk Assessment
- VALUATION — P/E of 81.79x is elevated versus the sector average of 22x, raising the bar for future growth to justify the premium.
- VALUATION DIVERGENCE — The DCF estimate of $98.64 suggests the current price of $433.33 represents a substantial 339% premium, indicating extreme overvaluation relative to this model.
- INSIDER SELLING — 10 insider sells versus 0 buys over the last 90 days signals a bearish sentiment from company insiders.
- ANALYST TARGET — The average price target of $340.58 implies a downside of -21.4% from the current price, suggesting analysts view the stock as overvalued.
- TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed....
Gross margin stands at 50.0% with a net margin (TTM) of 30.9%, indicating strong pricing power and operational efficiency, though prior-year comparisons for gross margin are unavailable. The balance sheet is healthy, with a debt-to-equity ratio of 0.45x and a current ratio of 2.21x, reflecting conservative leverage and ample short-term liquidity. Free cash flow is robust at $6.12 billion, generating a free cash flow yield of 1.3%, which supports the company's ability to reinvest in R&D and return capital to shareholders. Overall, the company is in solid financial health, with strong cash generation and a conservative capital structure that positions it well to navigate industry cycles.
- VALUATION — P/E of 81.79x is elevated versus the sector average of 22x, raising the bar for future growth to justify the premium. - VALUATION DIVERGENCE — The DCF estimate of $98.64 suggests the current price of $433.33 represents a substantial 339% premium, indicating extreme overvaluation relative to this model. - INSIDER SELLING — 10 insider sells versus 0 buys over the last 90 days signals a bearish sentiment from company insiders. - ANALYST TARGET — The average price target of $340.58 implies a downside of -21.4% from the current price, suggesting analysts view the stock as overvalued. - TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed.
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