One-glance verdict
Overvalued
$83.60 our estimate vs market $319.78
Wall Street consensus: $368.26 (340.5% higher than our fair-value estimate)
283% above our estimate, beyond the bull case
Fundamentals snapshot
Lam Research Corporation
LRCX · NMS · Technology · Semiconductor Equipment & Materials
Current price
$319.78
52-week range
$90.94 - $438.50
Market cap
$399.91B
Balance sheet
Healthy
33.11x Strong cushion
Net cash $1.02B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 17.6% last year.
- Reward Returns 66.8% on equity, ahead of 66% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Stock trades 160.3% above its 5-year average P/E.
What this company does
Lam Research Corporation
Lam Research builds and sells the very complex and expensive machinery that other companies use to create computer chips, the "brains" inside our phones, cars, and computers. The company makes money not only from selling new machines but also from servicing and upgrading the large number of machines already installed worldwide, creating a steady stream of income. Because nearly every piece of modern technology relies on these chips, Lam plays a critical and foundational role in the global technology supply chain (the entire network of businesses involved in creating and getting a product to customers).
How the company got here
Lam Research was started in 1980 by David K. Lam, an engineer who saw that chipmakers needed better tools to keep up with the demand for smaller and more powerful electronics. The company's first product was an automated machine for a process called plasma etching, which is a crucial step in carving microscopic circuits onto silicon wafers (the shiny discs that computer chips are made from). Through the years, Lam grew by inventing new technologies and by acquiring other companies to add more capabilities, like tools for cleaning the wafers. This focus on the highly technical, behind-the-scenes steps of chipmaking has made Lam a critical supplier to nearly every major semiconductor manufacturer in the world.
What it actually does
Think of Lam Research as a company that makes the ultra-precise tools and robots used in the factories that produce computer chips. You won't ever buy a Lam Research product in a store, but their equipment is essential for making the chips inside your smartphone, computer, and car. The company specializes in machines that perform a few key steps in the chip-making recipe with incredible precision, like adding or removing microscopic layers of materials on a silicon wafer. These processes are repeated hundreds of times to build up the complex, three-dimensional structures that make a modern chip work.
Systems
This is Lam's largest business, making up well over half of its revenue, and it involves selling the complex equipment that chip manufacturers put in their factories, which are called 'fabs'. These machines are highly specialized for tasks like 'etch' (using gases to carve away materials and create tiny features on the chip) and 'deposition' (adding ultra-thin layers of different materials onto the silicon wafer). The customers are the big chipmaking companies, who buy this equipment to outfit their production lines and manufacture the latest memory chips, processors, and other semiconductors. This part of the business is cyclical (it has big up-and-down swings) because it depends on chipmakers investing billions of dollars to build new factories or upgrade existing ones.
Customer Support Business Group (CSBG)
This part of the business, which provides a large and more stable slice of the company's revenue, is all about servicing the huge number of Lam machines already installed in factories around the world. After a chipmaker buys a multi-million dollar piece of equipment, they need spare parts, maintenance, and upgrades to keep it running efficiently and to adapt it for making newer kinds of chips. The CSBG provides all of these services and products, creating a recurring (ongoing and predictable) stream of income for Lam. This segment helps to smooth out the financial ups and downs of the main equipment sales business.
What management is betting on now
Lam's leadership is focused on the increasing complexity of chips, especially the move to 3D structures. As chipmakers stack components vertically to make them more powerful, they need more of the advanced etch and deposition tools that Lam specializes in, which management sees as a major growth driver. The company is also investing heavily in its customer support business, aiming to provide more services and data-driven solutions to help customers get the most out of their existing equipment. Finally, Lam is expanding its use of digital tools, like creating a 'digital twin' of the manufacturing process, to help chipmakers test and perfect their recipes in a virtual environment, saving them time and money.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$761.68M
FY2025 Q1
$1.46B
FY2025 Q2
$553.59M
FY2025 Q3
$1.02B
FY2025 Q4
$2.38B
FY2026 Q1
$1.59B
FY2026 Q2
$1.22B
FY2026 Q3
$809.82M
Revenue
$5.84B
Net income
$1.83B
Diluted EPS
1.45
Operating cash flow
$1.14B
Free cash flow
$809.82M
Fetching…
Sources
Revenue
$5.34B
Net income
$1.59B
Diluted EPS
1.26
Operating cash flow
$1.48B
Free cash flow
$1.22B
Fetching…
Sources
Revenue
$5.32B
Net income
$1.57B
Diluted EPS
1.24
Operating cash flow
$1.78B
Free cash flow
$1.59B
Fetching…
Sources
Revenue
$5.17B
Net income
$1.72B
Diluted EPS
1.34
Operating cash flow
$2.55B
Free cash flow
$2.38B
Fetching…
Sources
Revenue
$4.72B
Net income
$1.33B
Diluted EPS
1.03
Operating cash flow
$1.31B
Free cash flow
$1.02B
Fetching…
Sources
Revenue
$4.38B
Net income
$1.19B
Diluted EPS
0.92
Operating cash flow
$741.94M
Free cash flow
$553.59M
Fetching…
Sources
Revenue
$4.17B
Net income
$1.12B
Diluted EPS
0.86
Operating cash flow
$1.57B
Free cash flow
$1.46B
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Sources
Revenue
$3.87B
Net income
$1.02B
Diluted EPS
7.78
Operating cash flow
$862.43M
Free cash flow
$761.68M
Fetching…
Sources
Is it cheap or expensive?
Fair value $83.60 vs current price $319.78
Wall Street consensus is the average analyst price target: $368.26 (340.5% higher than our fair-value estimate).
Our most-likely fair value is $83.60 a share — about 73.9% below today's price of $319.78, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $1.0B - more cash than debt. Interest coverage 33.1x.
Net debt
$-1.02B
Interest coverage
33.11x
Lam Research Corporation's profit covers its interest bill about 33.1 times over. which is stronger than most peers shown here.
Healthy
Worse cushion
Baseline
Better cushion
LRCX
BASELINE
Lam Research Corporation
Total debt $3.73B Interest coverage 33.11x This is the baseline the peer rows are being compared against.
Total debt $7.27B Interest coverage 31.49x -5% vs LRCX Has roughly the same debt cushion as LRCX.
Total debt $2.26B Interest coverage 95.53x +188% vs LRCX Carries about 2.9x more debt cushion than LRCX.
Total debt $6.15B Interest coverage 16.59x -50% vs LRCX Carries about 2.0x less debt cushion than LRCX.
Total debt $0.00 Interest coverage 313.72x +847% vs LRCX Carries about 9.5x more debt cushion than LRCX.
Total debt $81.98M Interest coverage 1,042.33x +3,048% vs LRCX Carries about 31.5x more debt cushion than LRCX.
What you should know
The case for and against LRCX
3 Rewards
1 Risk
Rewards
-
Revenue grew 17.6% last year.
-
Returns 66.8% on equity, ahead of 66% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 160.3% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
60.22x
Forward P/E
39.25x
P/B
37.78x
P/S
18.44x
EV/EBITDA
50.83x
PEG ratio
1.86x
Profitability
How much profit each dollar creates
Gross margin
50.0%
Operating margin
35.0%
Net margin
30.9%
ROE
66.8%
ROA
22.8%
Health
Liquidity and balance-sheet strength
Debt / equity
0.35x
Current ratio
2.54x
Quick ratio
1.70x
Total debt
$3.73B
Total cash
$4.75B
Growth
How the business has been compounding
Revenue TTM
$21.68B
Revenue 5Y CAGR
6.0%
EPS TTM
5.31
EPS 5Y CAGR
8.2%
Cash flow
How much cash the business throws off
Operating CF TTM
$6.95B
Free CF TTM
$5.41B
FCF margin
25.0%
Dividend
Shareholder payout
Yield
0.3%
Payout ratio
19.1%
Last ex-div date
2026-06-17