Lam Research Corp

LRCX

Special Industry Machinery, NEC

Mkt Cap

$94.23B

PE

23.72

Debt

$4.984B

Cash

$5.127B

EV

$94.09B

FCF

$4.502B

Market Cap

$94.23B

P/E Ratio

23.72

Debt

$4.984B

Cash

$5.127B

EV

$94.09B

FCF

$4.502B

Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. The company offers ALTUS systems to deposit conformal films for tungsten metallization applications; SABRE electrochemical deposition products for copper interconnect transition that offers copper damascene manufacturing; SOLA ultraviolet thermal processing products for film treatments; and VECTOR plasma-enhanced CVD ALD products. It also provides SPEED gapfill high-density plasma chemical vapor deposition products; and Striker single-wafer atomic layer deposition products for dielectric film solutions. In addition, the company offers Flex for dielectric etch applications; Kiyo for conductor etch applications; Syndion for through-silicon via etch applications; and Versys metal products for metal etch processes. Further, it provides Coronus bevel clean products to enhance die yield; Da Vinci, DV-Prime, EOS, and SP series products to address various wafer cleaning applications; and Metryx mass metrology systems for high precision in-line mass measurement in semiconductor wafer manufacturing. The company sells its products and services to semiconductors industry in the United States, China, Europe, Japan, Korea, Southeast Asia, Taiwan, and internationally. Lam Research Corporation was incorporated in 1980 and is headquartered in Fremont, California.

Sector

10-Q
9/24/23
10-K
6/25/23
10-Q
3/26/23
10-Q
12/25/22
10-Q
9/25/22
10-K
6/26/22
10-Q
3/27/22
10-Q
12/26/21
10-Q
9/26/21
10-K
6/27/21
10-Q
3/28/21
10-Q
12/27/20
10-Q
9/27/20
10-K
6/28/20
10-Q
3/29/20
10-Q
12/29/19
10-Q
9/29/19
10-K
6/30/19
10-Q
3/31/19
10-Q
12/23/18
10-Q
9/23/18
10-K
6/24/18
10-Q
3/25/18
10-Q
12/24/17

DCF

Discounted Cash Flow Valuation of Lam Research Corp

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$4.502B	$5.437B	$6.47B	$7.586B	$8.763B	$9.968B	$11.16B	$12.31B	$13.36B	$14.26B	$14.97B	$149.7B
DCF		$4.727B	$4.892B	$4.988B	$5.01B	$4.956B	$4.827B	$4.627B	$4.366B	$4.053B	$3.7B	$37B
Value	$83.15B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 27%

Earnings Stability 91%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	06-2015	06-2016	06-2017	06-2018	06-2019	06-2020	06-2021	06-2022	06-2023	TTM
Net Margin	12%	16%	21%	21%	23%	22%	27%	27%	26%	25%
ROA	8.7%	8.9%	16%	26%	21%	19%	29%	31%	28%	24%
ROE	13%	16%	25%	37%	47%	44%	65%	73%	55%	49%

What is the average Net Margin?

The average Net Margin over the past 5 years is +24.32%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +1.1%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +25.66%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +1.35%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +53.36%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +5.5%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate reliability of earnings, and consideration about the future are more dependable.

Years	06-2015	06-2016	06-2017	06-2018	06-2019	06-2020	06-2021	06-2022	06-2023	TTM
Debt FCF	6.74	4.68	2.02	1.30	1.80	3.48	1.55	1.96	1.07	1.11
Debt Equity	0.78	0.93	0.56	0.48	1.11	1.29	0.83	0.80	0.61	0.62
MIN
Graham Stability	-	-	100%	100%	100%	100%	100%	100%	100%	100%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 1.11.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -0.07.

What is the Graham’s Stability?

Graham’s Stability measure stands at 1.00.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	06-2016	06-2018	06-2020	06-2022	Trend
Revenue	17%	9.5%	20%	1.2%	-0.83%
Net Income	26%	14%	26%	-2%	-2.5%
Stockholders Equity	4.8%	4.8%	17%	31%	1.7%
FCF	22%	14%	34%	83%	-1.4%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +9.49%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -0.83%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +13.64%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -2.49%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +4.78%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +1.67%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +14.45%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -1.4%.