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Lam Research Corp

Recommendation: Buy

Entry Date Symbol Recommendation Entry Price (USD) Target 1 (USD) Target 2 (USD) Holding Duration Potential Upside
24 Oct, 24 LRCX Buy USD 72.86 USD 79.0 USD 85.0 Same day 16.7%

Fundamentals

  • Previous Close 71.79
  • Market Cap126983.50M
  • Volume749523
  • P/E Ratio35.59
  • Dividend Yield0.82%
  • EBITDA4423.15M
  • Revenue TTM14241.14M
  • Revenue Per Share TTM107.67
  • Gross Profit TTM 7871.81M
  • Diluted EPS TTM27.29

Data Powered by EOD Historical Data (“EODHD”).

Company Overview

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. The company was incorporated in 1980 and is headquartered in Fremont, California.

Key Positives

Increased Shareholders' Wealth: ROE of 13.1% in Q1 FY25 vs Industry Median of 2.0%

Operarting Efficiency: Asset Turnover of 0.22x in Q1 FY25 vs Industry Median of 0.13x

Key Negatives

Lower Liquidity: Current Ratio of 2.53x in Q1 FY25 vs Industry Median of 3.35x 

Balance Sheet Risk: Debt-Equity of 0.59x in Q1 FY25 vs Industry Median of 0.18x

Key Investment Risks

Environmental Regulations, Supply Chain Risks, Intellectual Property Challenges, Technological Obsolescence, Research and Development Costs, Dependency on Semiconductor Cycles, etc.

Recommendation Summary

Technical Summary

Entry Price Support* Target 1 Target 2
72.86 65.0 79.0 85.0

Data Source: REFINITIV, Analysis: StockNextt

*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.

Key Reasons for Buy

LRCX's stock is currently trading above a key horizontal trendline, indicating a bullish candlestick pattern that presents strong buying opportunities. The 14-day Relative Strength Index (RSI) stands at 36.96, showing stability at support and reinforcing the potential for a reversal into bullish territory. Additionally, with the current market price (CMP) below the 50-period SMA, these levels are likely to act as significant resistance zones. These technical indicators point to a positive outlook for the stock, suggesting a potential shift in its price trajectory. With robust support levels and prevailing bullish sentiment, investors may find attractive opportunities to capitalize on LRCX's performance in the near term. Key resistance levels are USD 79.00 & USD 85.00 and support levels are USD 65 and USD 69.00.

As per the above-mentioned technical indicators analysis, a ‘Buy’ rating has been given to Lam Research Corporation (NASDAQ: LRCX) at the closing market price of USD 72.86 as of 23 October 2024.

Key Financials in Pictures

Income Statement

Balance Sheet

Change in Cash

Total Operating Cash

Dividends Paid

Data Powered by EOD Historical Data (“EODHD”).

Peer Comparison

Sector: Technology Industry: Semiconductor Equipment & Materials

Company Change (USD) Price (USD) Trailing PE (x) Forward PE (x) Price Sales TTM (x) Price to Book Value (x) Enterprise Value to Revenue (x) Enterprise Value to EBITDA (x)
LRCX
Lam Research Corp
1.30 1.81% 73.09 35.59 26.25 8.76 15.26 8.72 27.97
ASML
ASML Holding NV ADR
5.59 0.79% 711.27 49.01 44.05 13.98 26.27 13.85 38.25
ASMLF
ASML Holding NV
-2.94 0.41% 714.48 35.84 34.36 10.90 22.09 10.98 30.93
AMAT
Applied Materials Inc
1.79 1.10% 165.38 19.53 17.73 5.16 7.46 5.10 15.75
KLAC
KLA-Tencor Corporation
-1.07 0.17% 629.70 40.82 25.71 9.52 30.25 9.80 24.77

Data Powered by EOD Historical Data (“EODHD”).

Disclosures:

Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is October 23, 2024. The reference data in this report has been partly sourced from REFINITIV.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Disclaimer :
This report has been issued by StockNextt which has an Ontario Business Identification Number 1000958347 and British Columbia registration Number FM1051529 is a trade name under Kalkine Canada Advisory Services Inc. having Business Number 761925130BC0001. Kalkine Canada Advisory Services Inc. and StockNextt are collectively referred to as “StockNextt”, “we”, “us”, and “our”. The website https://stocknextt.com and associated pages are published by StockNextt. The information in this report and on the StockNextt website has been prepared from a wide variety of sources, which StockNextt, to the best of its knowledge and belief, considers accurate. StcokNextt has made every effort to ensure the reliability of information contained in its reports, newsletters, and websites. All information represents our views at the date of publication and may change without notice. The information in this report does not constitute an offer to sell securities or other financial products or a solicitation of an offer to buy securities or other financial products. Our reports contain general recommendations for investing in securities and other financial products. StockNextt does not offer financial advice based upon your personal financial situation or goals, and we shall not be held liable for any investment or trading losses you may incur by using the opinions expressed in our reports, publications, market updates, news alerts and corporate profiles. StockNextt does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. StockNextt’s general advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested. Please also read our Terms and conditions for further information. Employees and/or associates of StockNextt and its related entities may hold an interest in the securities or other financial products covered in this report or on the StockNextt website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.

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