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Lam Research Corporation (LRCX), based in Fremont, California, specializes in designing, manufacturing, marketing, refurbishing, and servicing semiconductor processing equipment essential for integrated circuit production. Valued at a market capitalization of $93.5 billion, its technology enables the deposition of specialized films on silicon wafers and the precision etching of these films to craft intricate circuit designs.
Shares of the chip giant have underperformed the broader market considerably over the past year. LRCX has gained 1.3% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 31%. In 2024, LRCX’s stock declined 7.3%, compared to SPX’s 25.2% rise on a YTD basis.
Narrowing the focus, LRCX has also lagged behind the Invesco Semiconductors ETF (PSI). The exchange-traded fund has gained 28.3% over the past year. Moreover, the ETF’s 13.9% gains on a YTD basis outshine the stock’s loss over the same time frame.
On Oct. 23, Lam Research released its first-quarter earnings, and its shares popped 5.1% in the following trading session. The company exceeded analysts' expectations for revenue and EPS. The company's guidance for the next quarter also came in above forecasts.
For the current fiscal year, ending in June 2025, analysts expect LRCX’s EPS to grow 17.7% to $3.52 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 28 analysts covering LRCX stock, the consensus is a “Moderate Buy.” That’s based on 16 “Strong Buy” ratings, two “Moderate Buys,” and ten “Holds.”
The current consensus has been consistent over the past months.
On Oct. 24, Stifel Financial Corp. (SF) analyst Brian Chin maintained a “Buy” rating on Lam Research and adjusted the price target downward from $105 to $100.
The mean price target of $94.23 represents a 29.7% premium to LRCX’s current price levels. The Street-high price target of $114 suggests an ambitious upside potential of 56.9%.
