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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Lam Research Corporation (XNAS:LRCX) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
LRCX
Name:
LAM RESEARCH CORPORATION (XNAS:LRCX)
Sector:
321.10M
Industry:
Semiconductor Equipment & Materials
CEO:
Mr. Timothy Archer
Total Employees:
17,700
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 173.99% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF LAM RESEARCH CORPORATION(LRCX) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SEMICONDUCTOR EQUIPMENT & MATERIALS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
430.21
One Month Price Target:
$433.5
Six Month Price Target :
$449.94
Likely Price in One Year's Time:
Ticker:
$469.67
Likely Trading Range Today Under (Normal Volatility)
$428.28
Price Upper limit ($) :
$433.18
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$401.11
This week:
$365.15
This month :
$300.09
Other Primary facts
Market Cap:
58.46B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
136.99M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
19.6%
-18.43%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$565.13
$502.62
$295.29
$357.80
Medium risk (<10%) entry points
Buy Call
Sell Call
$482.27
Buy Put:
Sell Put:
$468.93
$377.98
$391.49
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
LRCX
Sharpe Ratio:
3.35%
Comparison:
LRCX, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 20.90% higher than the industry
& ratio is 47.16% higher than the market/S&P 500 average
Average Returns/Yield of
LRCX
Daily returns:
0.12%
Weekly returns:
0.61%
Monthly returns:
2.43%
Yearly returns:
28.31%
Comparison of returns:
Average annual returns/yield (last 3 years) is 2.83% above industry average
Classification:
LRCX, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.9
Statistical test of Returns:
LRCX has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.35%
Weekly Volatility:
7.50%
Monthly Volatility:
14.99%
Yearly Volatility:
51.93%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.47%
Volatility in last five trading days has been -86.06% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.76%
Weekly VaR:
-15.12%
Monthly VaR:
-30.25%
How Much Can the price of
LRCX
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-25%
Worst case (decline):
>85%
This translates to price declining to:
$321.13
This translates to price declining to:
$64.53
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
LRCX is a 113.48% riskier investment compared to the market/S&P 500 & is 82.89% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -10.50% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
LRCX
Beta in relation to market/S&P 500--1.36
Expected beta in 1 year's time:
0.941
Expected beta in 3 year's time:
1.33
Unlevered (debt free) Beta:
0.777
Beta in relation to Nasdaq (XNAS):
1.461
Beta in relation to all global stocks::
1.041
Beta Comparison & Analysis
Beta of competitors/peers::
1.492
Beta is -8.52% lower than peers
Average Industry Beta:
1.394
Beta is -2.11% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
64.19%
Sustainable growth rate is 149.45% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.166
Alpha is 6.41% above industry average alpha yield
Alpha is 1057% higher than market/& is unsustainably high
Analysis of Cost of Capital of
LRCX
Equity cost of capital:
0.125
Equity cost of capital is -1.58% below industry mean WACC
Unlevered (without debt) cost of capital:
7.11%
Before-tax cost of debt:
3.81%
After-tax cost of debt:
3.01%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.01%
WACC is -11.15% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$122.18
Revenue growth rate per share of (3Y):
10.13
Annual revenue growth rate is -14.70% below industry average
EPS:
$31.99
Expected Annual growth rate of EPS (3Y):
30.72%
Expected future EPS growth rate is -1.12% lower than the Semiconductor Equipment & Materials industry
Free cash flow (FCF) per share:
$27.65
Balance sheet equity growth per share: 166.01%
Equity growth rate per share is 601.43% higher than the industry
Debt per share
$36.42
EBITDA per share
$41.30
Valuation Analysis Today of
LRCX
P/E Ratio:
13.14
P/E Ratio of Competitors/Peers:
235.46
P/E ratio is -94.42% lower than main peers & is -54.23% lower than the industry
Stock price/value with industry average P/E ratio: $918.10
LRCX is -53.14% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $131.72
Present value of the expected future dividends only: $63.88
P/S (Price to Sales ratio):
3.52
Price to sales ratio is -44.99% below the industry mean
P/B (Price to book value ratio):
10.13
Price to free cash flow: 15.56
-
Net income growth rate (3Y):
84.79%
Net income growth rate is -87.60% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 4.08%
Dividend yeild: 1.39%
Previous Dividend: $1.50
Previous adjusted dividend: $1.50
Previous Dividend: $6.00
Expected next dividend best case: $1.62
Expected next dividend worst case: $1.38
Average dividend payment (long-term): $1.33
Average dividend increase/decrease (growth rate) % per period: 2.84%
Expected next dividend payment date: 10/04/2022
Expected next dividend record date: 13/09/2022
-
Previous dividend payment date: 07/06/2022
Previous dividend record date: 15/06/2022
-
Dividend History:
2022-06-14--$1.50
2021-12-14--$1.50
2021-06-15--$1.30
2022-03-15--$1.50
2021-09-27--$1.50
2021-03-16--$1.30
Dividend growth rate is -127.54% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
85.72%
Net debt to equity ratio:
16.38%
Debt to assets ratio:
32.05%
Net debt to assets ratio:
6.12%
Debt-to-asset ratio is -35.67% below industry average
Ability to repay debt:
Interest coverage ratio:
29.74
Interest coverage ratio is 52.89% more than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 0.13%
Analysis of Key Statistics
Correlation of price movement with the market:
0.768
Statistical significance of correlation:
LRCX has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.604
Stock price is 27.24% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.604
Correlation of price movement with Nasdaq (^IXIC):
-0.009
Covariance of price movement with the market:
-0.018
Kurtosis
4.335
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.07
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
LRCX
Gross Profit Margin Ratio:
184%
Operating Profit Margin Ratio:
31.18%
Operating profit margin is -794.61% lower than the industry
Net Profit Margin Ratio:
184%
Effective Tax Rate:
11.70%
Effective tax rate is -10.01% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
78.02%
Return on equity (ROE) is 448.79% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
29.17%
Return on assets (ROA) is 238.19% higher than the industry
Financial Leverage:
1.5x
Current Ratio:
3.27
Current ratio is -25.51% below industry average
Cash Conversion Cycle (days):
67.2
Cash conversion cycle is 15.31% above industry average
The remaining useful life of property plant & equipment is: 0.0 years
Stock based compensation to net income ratio:
1.28%
In-depth Efficiency Analysis
Revenue generated per employee:
945.6K
Each employee generates 61% more revenue than industry average revenue per employee
EBITDA generated per employee:
319.6K
Each employee generates 90% more EBITDA than industry average revenue per employee
Profit generated per employee:
256.6K
Each employee generates 135% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
18.1K
Each employee generates 5% more free cash flow than industry average revenue per employee
Assets/Capital per employee
249.8K
Each employee generates 5% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 19.24%
Growth rate in R&D investment/expenditure is -18.70% lower than the industry
Competitors/Peer firms of
LRCX
ANALOG DEVICES, INC. (XNAS:ADI)
MICRON TECHNOLOGY, INC. (XNAS:MU)
ATLASSIAN CORPORATION PLC (XNAS:TEAM)
MARVELL TECHNOLOGY, INC (XNAS:MRVL)
KLA Corporation (XNAS:KLAC)
WORKDAY, INC. (XNAS:WDAY)
COINBASE GLOBAL, INC. (XNAS:COIN)
NXP Semiconductors NV (XNAS:NXPI)
AUTODESK, INC. (XNAS:ADSK)
Current Analyst Ratings
Strong buy�17%
Buy�50%
Hold�13%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/27/22
Revenue:
16.74B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
9.05B
7.69B
1.57B
-
893.26M
-
-
2.47B
12.71M
190.23M
324.20M
5.66B
5.22B
4.54B
5.14B
601.96M
4.54B
Statement of Cash Flow
Date:
Period:
79.87M
Differed Income Tax :
- 13023.00K
Stock Based Compensation :
58.10M
Change in Working Capital :
- 838480.00K
Accounts Receivables:
-
Other Working Capital:
7.74B
Other Non-Cash Items:
- 8690.00K
Net Cash Provided by Operating Activities:
457.52M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 25297.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
9/26/21
2022
Q1
4.04B
569.47M
4.61B
3.40B
2.87B
263.74M
11.14B
1.37B
1.49B
125.01M
-
-
1.43B
4.42B
-
15.57B
837.71M
6.37M
191.97M
931.42M
1.63B
3.41B
4.99B
1.35B
6.34B
-
9.75B
141.00K
15.65B
- 81768.0K
- 9751770.00K
September 26, 2021 at 6:00:00 AM
11.52B
5.82B
15.57B
-
5.00B
953.2M
763.34M
- 141350.00K
596.69M
- 6338.00K
742.00K
- 1236753.00K
- 185431.00K
188.00K
- 1427592.00K
- 3776.00K
- 377151.00K
4.29B
4.67B
457.52M
- 136427.00K
321.10M
Our Proprietary Portfolio Rating
Our Rating:
A
Price Forecast/Expected Price in Next 5 Years of
LRCX
2023
2024
2025
2026
2027
$472.02
$3,157.79
$3,447.43
$3,763.63
$4,108.83