Lam Research Stock To $151?
Lam Research (LRCX) stock has jumped 27% during the past month, and is currently trading at $214.38. Our multi-factor assessment suggests that it may be time to reduce exposure to LRCX stock. We are primarily concerned current valuation and a price of $151 may not be out of reach. We believe there is not much to fear in LRCX stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive.
Below is our assessment:
| CONCLUSION | |
|---|---|
| What you pay: | |
| Valuation | Very High |
| What you get: | |
| Growth | Strong |
| Profitability | Very Strong |
| Financial Stability | Very Strong |
| Downturn Resilience | Weak |
| Operating Performance | Strong |
| Stock Opinion | Relatively Expensive |
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Let’s get into details of each of the assessed factors but before that, for quick background: With $271 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 Very High
| LRCX | S&P 500 | |
|---|---|---|
| Price-to-Sales Ratio | 13.9 | 3.3 |
| Price-to-Earnings Ratio | 46.9 | 24.1 |
| Price-to-Free Cash Flow Ratio | 49.1 | 21.5 |
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 4.0% over the last 3 years
- Its revenues have grown 26% from $16 Bil to $20 Bil in the last 12 months
- Also, its quarterly revenues grew 27.7% to $5.3 Bil in the most recent quarter from $4.2 Bil a year ago.
| LRCX | S&P 500 | |
|---|---|---|
| 3-Year Average | 4.0% | 5.6% |
| Latest Twelve Months* | 25.7% | 6.4% |
| Most Recent Quarter (YoY)* | 27.7% | 7.3% |
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 $6.5 Bil representing operating margin of 33.0%
- With cash flow margin of 32.6%, it generated nearly $6.4 Bil in operating cash flow over this period
- For the same period, LRCX generated nearly $5.8 Bil in net income, suggesting net margin of about 29.7%
| LRCX | S&P 500 | |
|---|---|---|
| Current Operating Margin | 33.0% | 18.8% |
| Current OCF Margin | 32.6% | 20.5% |
| Current Net Income Margin | 29.7% | 13.1% |
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 $271 Bil. This implies Debt-to-Equity Ratio of 1.6%
- LRCX Cash (including cash equivalents) makes up $6.7 Bil of $22 Bil in total Assets. This yields a Cash-to-Assets Ratio of 30.6%
| LRCX | S&P 500 | |
|---|---|---|
| Current Debt-to-Equity Ratio | 1.6% | 19.9% |
| Current Cash-to-Assets Ratio | 30.6% | 7.2% |
[5] 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 $220.40 on 12 January 2026 , and currently trades at $214.38
| LRCX | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -56.8% | -25.4% |
| Time to Full Recovery | 423 days | 464 days |
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
| LRCX | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -45.0% | -33.9% |
| Time to Full Recovery | 116 days | 148 days |
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
| LRCX | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -75.0% | -56.8% |
| Time to Full Recovery | 2,011 days | 1,480 days |
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.
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