LRCX Jumps 15% In A Week, Should You Buy The Stock?

We believe there is not much to fear in LRCX stock given its overall Strong operating performance and financial condition. This is aligned with the stock’s High valuation because of which we think it is Fairly Priced. Here is our multi-factor assessment.

But no matter how attractive, investing in a single stock carries high risk. Trefis High Quality Portfolio and is designed to reduce stock-specific risk while giving upside exposure

Let’s get into details of each of the assessed factors but before that, for quick background: With $187 Bil in market cap, Lam Research provides semiconductor processing equipment design, manufacturing, refurbishment, and services for integrated circuit fabrication, serving global markets including the US, Asia, and Europe.

[1] Valuation Looks High

This table highlights how LRCX is valued vs broader market. For more details see: LRCX Valuation Ratios

[2] Growth Is Strong

• Lam Research has seen its top line grow at an average rate of 3.5% over the last 3 years
• Its revenues have grown 24% from $15 Bil to $18 Bil in the last 12 months
• Also, its quarterly revenues grew 33.6% to $5.2 Bil in the most recent quarter from $3.9 Bil a year ago.

This table highlights how LRCX is growing vs broader market. For more details see: LRCX Revenue Comparison

[3] Profitability Appears Very Strong

• LRCX last 12 month operating income was $5.9 Bil representing operating margin of 32.0%
• With cash flow margin of 33.5%, it generated nearly $6.2 Bil in operating cash flow over this period
• For the same period, LRCX generated nearly $5.4 Bil in net income, suggesting net margin of about 29.1%

This table highlights how LRCX profitability vs broader market. For more details see: LRCX Operating Income Comparison

[4] Financial Stability Looks Very Strong

• LRCX Debt was $4.5 Bil at the end of the most recent quarter, while its current Market Cap is $187 Bil. This implies Debt-to-Equity Ratio of 2.4%
• LRCX Cash (including cash equivalents) makes up $6.4 Bil of $21 Bil in total Assets. This yields a Cash-to-Assets Ratio of 29.9%

[4] Downturn Resilience Is Weak

LRCX has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• LRCX stock fell 56.8% from a high of $72.98 on 14 January 2022 to $31.50 on 14 October 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 11 December 2023
• Since then, the stock increased to a high of $146.99 on 2 October 2025 $146.99

 
2020 Covid Pandemic

• LRCX stock fell 45.0% from a high of $34.16 on 13 February 2020 to $18.79 on 20 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 14 July 2020

 
2008 Global Financial Crisis

• LRCX stock fell 75.0% from a high of $6.00 on 17 July 2007 to $1.50 on 19 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 23 May 2014

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read LRCX Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – S&P 500, Russell, and S&P midcap. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.