Lam Research Corp (LRCX) stock analysis

P/E above its 5-year median

Lam Research's P/E of 35.2 is above its own 5-year median of 24.3.

P/E above the industry

Lam Research's P/E of 35.2 is above the Special Industry Machinery, except Metalworking median of 32.8.

EV/EBITDA above its 5-year median

Lam Research's EV/EBITDA of 28.8 is above its 5-year median of 19.8.

P/B above the industry

Lam Research's price-to-book of 21.19 is above the Special Industry Machinery, except Metalworking median of 2.10.

Trading above fair value

The share price of $235.88 is above our fair value estimate of $177.50.

Margin of safety under 20%

The price is 32.9% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 10.1% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 20.2% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 45.4% over the last twelve months, against a 5-year average of 13.2% a year.

Growing faster than the industry

Revenue grew 33.4% over the last twelve months; the Special Industry Machinery, except Metalworking median is 5.7%.

Guidance issued

The latest outlook (quarter ending December 27, 2026 Revenue, Oct 21, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin improving

Gross margin was 51.1% over the last twelve months, against 49.3% a year earlier.

Return on equity over 15%

Return on equity was 70.1% over the last twelve months and averaged 61.2% over five years.

Return on capital over 10%

Return on invested capital was 92.3%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Lam Research's return on equity of 70.1% is above the Special Industry Machinery, except Metalworking median of 4.6%.

Earnings grew over 5 years

Net income grew 13.2% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 32.3% over the last twelve months, against a 5-year average of 27.7%.

Net margin above the industry

Lam Research's net margin of 32.3% is above the Special Industry Machinery, except Metalworking median of 5.1%.

Low debt

Debt is 26.9% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 83.0% five years ago to 26.9%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 203% of total debt.

Interest well covered

Operating income covers interest expense 63.9 times.

Short-term assets cover short-term debts

Current assets are 2.48 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 18.88; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Lam Research paid dividends worth 0.5% of the share price over the last twelve months.

Yield below Treasuries

The 0.5% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Lam Research yields 0.5%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 15.4% of net income.

Covered by free cash flow

Dividends take 19.9% of free cash flow.