TLDR
- Lam Research shares rose 1.4% to $328.51 on below-average volume.
- Analysts hold a “Moderate Buy” consensus rating with an average price target of $361.81.
- The company beat Q4 estimates with $1.82 EPS and $6.72 billion in revenue, up 30% year over year.
- Lam raised its quarterly dividend from $0.26 to $0.33 per share.
- Two insiders sold stock in recent weeks, while institutions own 84.61% of shares outstanding.
Lam Research (NASDAQ: LRCX) stock climbed 1.4% on Wednesday, closing at $328.51. The stock touched a high of $330.50 during the session.
Lam Research Corporation, LRCX
Trading volume came in light. About 7.6 million shares changed hands, roughly 30% below the average of 10.8 million.
Wall Street still likes the semiconductor equipment maker. The stock carries a “Moderate Buy” consensus rating from analysts.
The average price target sits at $361.81. That implies room to run from current levels.
Price target moves have been mixed this year. Rothschild & Co Redburn raised its target to $420, while Morgan Stanley trimmed its target to $367 in July.
Berenberg Bank also set a $420 target earlier this month. Twenty-six analysts rate the stock a Buy, one calls it a Strong Buy, and five have it at Hold.
Earnings Beat Expectations
Lam posted its last quarterly results on July 29. The company earned $1.82 per share, beating estimates of $1.69.
Revenue came in at $6.72 billion, above the $6.66 billion analysts expected. That revenue figure marked a 30% jump from the same quarter last year.
Net margin stood at 31.27%, and return on equity hit 67.60%. For the current fiscal year, analysts project full-year earnings of $9.32 per share.
Lam’s guidance for its next quarter calls for EPS between $2.00 and $2.30. The company also sweetened its payout to shareholders.
The quarterly dividend rose from $0.26 to $0.33 per share. That dividend pays out on October 14 to investors of record as of September 23.
On an annualized basis, that works out to $1.32 per share, a 0.4% yield. The payout ratio sits at 22.92% of earnings.
Insider Selling Continues
Director Bethany Mayer sold 9,557 shares on September 9 at an average price of $314.74. That sale totaled just over $3 million and cut her stake by 31.28%.
Insider Ava Harter also sold stock. Harter offloaded 5,000 shares on August 31 at $302.46, a transaction worth $1.51 million under a prearranged trading plan.
Over the past quarter, insiders have sold nearly 33,000 shares worth over $10.6 million combined. Insiders still own a small sliver of the company, just 0.31% of shares.
Institutional investors control the bulk of the stock. Firms like World Equity Group, Tenzing Financial, and Gibraltar Capital Management all added to their positions in the second quarter, and institutions now hold 84.61% of the company.
Lam’s balance sheet looks solid heading into the back half of the year. The debt-to-equity ratio sits at 0.30, with a current ratio of 2.63.
The stock’s 50-day moving average is $304.67, and its 200-day average is $300.20. Market cap stands at $411.11 billion, with a P/E ratio of 57.03.
Lam Research will host its next quarterly earnings call on October 21 at 2:00 p.m. Pacific Time. The webcast will be available through the investor relations section of the company’s website, with a replay posted roughly three hours after the call ends.
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