Lam Research (NASDAQ:LRCX) Shares Down 5.7% - Here's Why

Key Points

• Lam Research shares fell 5.7% on Friday, trading as low as $374.31 after a sharp increase in volume, with nearly 19.5 million shares changing hands versus the average 11.2 million.
• Despite the pullback, the stock still has broad analyst support: Wells Fargo raised its price target to $450 and kept an Overweight rating, while the overall consensus remains a Moderate Buy with a $334.43 average target.
• The company reported strong recent fundamentals, including quarterly EPS of $1.47 versus $1.36 expected and revenue up 23.8% year over year, while also announcing a $0.26 quarterly dividend and seeing notable insider selling in recent months.

Lam Research Corporation (NASDAQ:LRCX - Get Free Report)'s share price traded down 5.7% on Friday . The company traded as low as $374.31 and last traded at $379.09. Approximately 19,490,885 shares changed hands during mid-day trading, an increase of 74% from the average daily volume of 11,200,616 shares. The stock had previously closed at $401.82.

Key Stories Impacting Lam Research

Here are the key news stories impacting Lam Research this week:

• Positive Sentiment: Wells Fargo raised its price target on Lam Research to $450 from $365 and kept an Overweight rating, signaling continued confidence in the company’s growth outlook and semiconductor capital equipment demand. Wells Fargo Raises its Price Target on Lam Research (LRCX)
• Positive Sentiment: Lam Research was highlighted by Zacks as a stock to watch, citing earnings growth and price strength, which may reinforce investor optimism around the stock’s momentum. Earnings Growth & Price Strength Make Lam Research (LRCX) a Stock to Watch
• Positive Sentiment: Micron’s strong earnings and upbeat memory-chip outlook lifted chip stocks broadly, while Lam Research gained attention for opening a Boise office to get closer to Micron’s memory expansion plans, underscoring its exposure to a key growth customer. Lam Research (LRCX) Opens Boise Office To Get Closer To Micron’s Memory Expansion
• Positive Sentiment: Lam Research was among the after-hours gainers alongside other semiconductor names, reflecting broader enthusiasm for AI chip stocks and improving sentiment across the sector. Top After-Hours Gainers Today Beyond Micron: QCOM, AMAT, LRCX Surge
• Neutral Sentiment: Brokerage data showed Lam Research with an average “Moderate Buy” recommendation, which supports a constructive but not especially new fundamental outlook. Lam Research Corporation NASDAQ: LRCX Receives Average Recommendation of "Moderate Buy" from Brokerages
• Neutral Sentiment: A report on short interest noted no meaningful short-interest build, so it does not appear to be a major driver for the stock.

Analyst Ratings Changes

A number of research analysts have recently commented on the stock. HSBC upped their price objective on shares of Lam Research from $221.00 to $247.00 and gave the company a "hold" rating in a research report on Friday, April 24th. Rothschild & Co Redburn upped their price target on Lam Research from $305.00 to $420.00 and gave the company a "buy" rating in a report on Wednesday, June 17th. Wall Street Zen lowered Lam Research from a "buy" rating to a "hold" rating in a report on Sunday, May 10th. Sanford C. Bernstein boosted their price objective on Lam Research from $325.00 to $340.00 and gave the company an "outperform" rating in a research report on Thursday, May 21st. Finally, Susquehanna upped their target price on Lam Research from $350.00 to $385.00 and gave the company a "positive" rating in a research note on Thursday, April 23rd. Twenty-eight investment analysts have rated the stock with a Buy rating and six have issued a Hold rating to the stock. According to data from MarketBeat, the company currently has an average rating of "Moderate Buy" and a consensus price target of $334.43.

Lam Research Stock Performance

The company has a market capitalization of $474.08 billion, a P/E ratio of 71.53, a price-to-earnings-growth ratio of 3.09 and a beta of 1.85. The firm has a 50 day moving average price of $311.62 and a two-hundred day moving average price of $248.67. The company has a debt-to-equity ratio of 0.35, a quick ratio of 1.77 and a current ratio of 2.54.

Lam Research (NASDAQ:LRCX - Get Free Report) last posted its earnings results on Wednesday, April 22nd. The semiconductor company reported $1.47 EPS for the quarter, topping the consensus estimate of $1.36 by $0.11. Lam Research had a return on equity of 66.21% and a net margin of 30.94%.The business had revenue of $5.84 billion during the quarter, compared to the consensus estimate of $5.70 billion. During the same quarter last year, the company earned $1.04 EPS. Lam Research's revenue was up 23.8% on a year-over-year basis. Lam Research has set its Q4 2026 guidance at 1.500-1.800 EPS. On average, research analysts expect that Lam Research Corporation will post 5.7 earnings per share for the current fiscal year.

Lam Research Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Wednesday, July 8th. Investors of record on Wednesday, June 17th will be given a dividend of $0.26 per share. The ex-dividend date is Wednesday, June 17th. This represents a $1.04 dividend on an annualized basis and a dividend yield of 0.3%. Lam Research's dividend payout ratio (DPR) is 19.62%.

Insider Activity at Lam Research

In other Lam Research news, Director Eric Brandt sold 54,500 shares of the business's stock in a transaction dated Thursday, June 11th. The shares were sold at an average price of $350.80, for a total value of $19,118,600.00. Following the transaction, the director directly owned 199,205 shares in the company, valued at $69,881,114. The trade was a 21.48% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Ava Harter sold 6,010 shares of the company's stock in a transaction dated Monday, April 27th. The stock was sold at an average price of $258.66, for a total transaction of $1,554,546.60. Following the sale, the insider directly owned 53,205 shares in the company, valued at $13,762,005.30. This represents a 10.15% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold 86,339 shares of company stock valued at $27,680,267 in the last ninety days. Insiders own 0.31% of the company's stock.

Institutional Investors Weigh In On Lam Research

A number of hedge funds and other institutional investors have recently bought and sold shares of LRCX. PMV Capital Advisers LLC acquired a new stake in shares of Lam Research in the fourth quarter valued at $25,000. Stance Capital LLC acquired a new position in Lam Research during the 3rd quarter worth about $26,000. Bayban bought a new stake in Lam Research during the 4th quarter worth about $26,000. Vermillion Wealth Management Inc. bought a new stake in Lam Research during the 1st quarter worth about $26,000. Finally, Cedar Mountain Advisors LLC increased its position in Lam Research by 242.9% in the 1st quarter. Cedar Mountain Advisors LLC now owns 120 shares of the semiconductor company's stock valued at $26,000 after acquiring an additional 85 shares in the last quarter. 84.61% of the stock is owned by institutional investors and hedge funds.

About Lam Research

Lam Research Corporation NASDAQ: LRCX is a global supplier of wafer fabrication equipment and services to the semiconductor industry. Founded in 1980 by David K. Lam and headquartered in Fremont, California, the company develops and manufactures systems used in multiple stages of semiconductor device production, including thin film deposition, plasma etch, wafer cleaning and related process modules and automation.

Lam's product portfolio covers core process technologies employed by logic and memory manufacturers, with equipment designed to support advanced-node patterning, 3D NAND and other emerging device architectures.

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