Lam Research (NASDAQ:LRCX) Trading Down 6.3% - Should You Sell?

Key Points

• Lam Research shares fell 6.3% to around $307.17, with nearly 9.94 million shares traded. The stock remains above its 200-day moving average but below its 50-day average.
• Analysts maintain a generally positive outlook, with a consensus “Moderate Buy” rating and an average price target of $358.47; several firms recently raised targets as high as $480.
• The company recently exceeded quarterly earnings and revenue estimates, reporting $1.82 EPS and $6.72 billion in revenue, while revenue increased 30% year over year. However, insiders sold more than $27.6 million of stock over the past three months.

Lam Research Corporation (NASDAQ:LRCX - Get Free Report) shares were down 6.3% during mid-day trading on Wednesday . The stock traded as low as $305.08 and last traded at $307.17. 9,943,609 shares traded hands during mid-day trading, a decline of 12% from the average daily volume of 11,243,897 shares. The stock had previously closed at $327.92.

Analysts Set New Price Targets

LRCX has been the topic of several research analyst reports. New Street Research raised their price objective on Lam Research from $235.00 to $280.00 and gave the stock a "neutral" rating in a research note on Monday, April 27th. Stifel Nicolaus increased their price objective on Lam Research from $325.00 to $425.00 and gave the stock a "buy" rating in a report on Friday, July 10th. Citigroup reiterated a "buy" rating and issued a $450.00 target price (up from $315.00) on shares of Lam Research in a research report on Wednesday, June 17th. Bank of America raised their target price on shares of Lam Research from $330.00 to $480.00 and gave the company a "buy" rating in a research note on Tuesday, June 23rd. Finally, Wall Street Zen downgraded shares of Lam Research from a "buy" rating to a "hold" rating in a research report on Sunday, May 10th. One research analyst has rated the stock with a Strong Buy rating, twenty-six have issued a Buy rating and five have assigned a Hold rating to the company. Based on data from MarketBeat.com, the company has a consensus rating of "Moderate Buy" and a consensus price target of $358.47.

Lam Research Trading Down 6.3%

The firm has a market capitalization of $384.37 billion, a price-to-earnings ratio of 53.33, a price-to-earnings-growth ratio of 1.32 and a beta of 1.84. The company has a quick ratio of 1.91, a current ratio of 2.63 and a debt-to-equity ratio of 0.30. The firm's 50 day moving average is $339.86 and its 200 day moving average is $284.93.

Lam Research (NASDAQ:LRCX - Get Free Report) last posted its quarterly earnings results on Wednesday, July 29th. The semiconductor company reported $1.82 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.69 by $0.13. Lam Research had a net margin of 31.27% and a return on equity of 67.60%. The firm had revenue of $6.72 billion for the quarter, compared to analyst estimates of $6.66 billion. During the same quarter in the previous year, the business posted $1.33 earnings per share. The firm's quarterly revenue was up 30.0% compared to the same quarter last year. Lam Research has set its Q1 2027 guidance at 2.000-2.300 EPS. Equities analysts forecast that Lam Research Corporation will post 9.32 earnings per share for the current year.

Insider Activity

In related news, Director Abhijit Y. Talwalkar sold 18,282 shares of the stock in a transaction on Monday, July 13th. The stock was sold at an average price of $335.00, for a total value of $6,124,470.00. Following the completion of the transaction, the director owned 87,142 shares in the company, valued at $29,192,570. This trade represents a 17.34% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Eric Brandt sold 54,500 shares of Lam Research stock in a transaction dated Thursday, June 11th. The stock was sold at an average price of $350.80, for a total value of $19,118,600.00. Following the completion of the transaction, the director directly owned 199,205 shares in the company, valued at $69,881,114. This represents a 21.48% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 80,441 shares of company stock valued at $27,614,296 over the last three months. Insiders own 0.31% of the company's stock.

Institutional Investors Weigh In On Lam Research

Several hedge funds have recently made changes to their positions in LRCX. Field & Main Bank purchased a new position in Lam Research during the 2nd quarter worth approximately $2,245,000. SPX Gestao de Recursos Ltda purchased a new stake in shares of Lam Research in the second quarter valued at $747,000. Wellington Management Group LLP lifted its holdings in shares of Lam Research by 291.2% in the second quarter. Wellington Management Group LLP now owns 1,215,581 shares of the semiconductor company's stock valued at $526,748,000 after purchasing an additional 904,824 shares in the last quarter. Archer Investment Corp acquired a new stake in shares of Lam Research in the second quarter worth $676,000. Finally, Fox Hill Wealth Management boosted its position in shares of Lam Research by 86.5% in the second quarter. Fox Hill Wealth Management now owns 4,944 shares of the semiconductor company's stock worth $2,142,000 after buying an additional 2,293 shares during the period. Hedge funds and other institutional investors own 84.61% of the company's stock.

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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