Lam Research (NASDAQ:LRCX) Shares Down 6% - What's Next?

Key Points

• Lam Research shares fell 6% to $239.11 in heavy trading, with volume 72% above the average daily level.
• Despite the sell-off, analysts maintain a broadly positive view: 26 rate the stock a Buy and six a Hold, producing a “Moderate Buy” consensus and an average price target of $360.23.
• The company exceeded quarterly expectations with $2.20 in EPS and $8.22 billion in revenue, while revenue surged 54.4% year over year; Lam Research also increased its quarterly dividend to $0.33.

Lam Research Corporation (NASDAQ:LRCX - Get Free Report)'s stock price fell 6% on Friday. The company traded as low as $232.61 and last traded at $239.11. Approximately 18,587,853 shares were traded during trading, an increase of 72% from the average daily volume of 10,791,091 shares. The stock had previously closed at $254.39.

Analyst Ratings Changes

Several analysts have recently issued reports on LRCX shares. UBS Group restated a "buy" rating and set a $400.00 target price (down from $425.00) on shares of Lam Research in a research report on Thursday, October 22nd. Morgan Stanley set a $339.00 price objective on shares of Lam Research and gave the company an "overweight" rating in a research report on Thursday, October 22nd. Citigroup reaffirmed a "buy" rating and issued a $435.00 price objective (down from $450.00) on shares of Lam Research in a research note on Thursday, October 22nd. TD Cowen restated a "buy" rating and set a $400.00 price objective (up from $340.00) on shares of Lam Research in a research note on Thursday, July 9th. Finally, Wells Fargo & Company reissued an "overweight" rating and issued a $350.00 price objective (down from $450.00) on shares of Lam Research in a research report on Thursday, July 30th. Twenty-six analysts have rated the stock with a Buy rating and six have issued a Hold rating to the stock. Based on data from MarketBeat, the company presently has a consensus rating of "Moderate Buy" and an average price target of $360.23.

Lam Research Price Performance

The company has a current ratio of 2.48, a quick ratio of 1.86 and a debt-to-equity ratio of 0.27. The firm has a market capitalization of $298.69 billion, a PE ratio of 35.63, a P/E/G ratio of 0.94 and a beta of 1.85. The firm's fifty day moving average price is $295.90 and its 200 day moving average price is $283.68.

Lam Research (NASDAQ:LRCX - Get Free Report) last posted its earnings results on Wednesday, October 21st. The semiconductor company reported $2.20 EPS for the quarter, topping the consensus estimate of $2.18 by $0.02. The firm had revenue of $8.22 billion for the quarter, compared to analyst estimates of $8.14 billion. Lam Research had a return on equity of 72.15% and a net margin of 32.34%. Lam Research's revenue for the quarter was up 54.4% compared to the same quarter last year. During the same period last year, the company earned $1.26 earnings per share. As a group, equities analysts forecast that Lam Research Corporation will post 9.59 earnings per share for the current year.

Lam Research Increases Dividend

The business also recently declared a quarterly dividend, which was paid on Wednesday, October 14th. Shareholders of record on Wednesday, September 23rd were issued a $0.33 dividend. This is an increase from Lam Research's previous quarterly dividend of $0.26. This represents a $1.32 annualized dividend and a dividend yield of 0.6%. The ex-dividend date of this dividend was Wednesday, September 23rd. Lam Research's dividend payout ratio is currently 19.67%.

Insiders Place Their Bets

In other news, insider Ava Harter sold 5,000 shares of Lam Research stock in a transaction that occurred on Monday, August 31st. The shares were sold at an average price of $302.46, for a total value of $1,512,300.00. Following the transaction, the insider directly owned 42,462 shares of the company's stock, valued at $12,843,056.52. This trade represents a 10.53% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Bethany Mayer sold 9,557 shares of Lam Research stock in a transaction that occurred on Wednesday, September 9th. The stock was sold at an average price of $314.74, for a total transaction of $3,007,970.18. Following the transaction, the director owned 20,995 shares in the company, valued at approximately $6,607,966.30. The trade was a 31.28% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Company insiders own 0.31% of the company's stock.

Institutional Investors Weigh In On Lam Research

Several hedge funds have recently bought and sold shares of the business. State Street Corp increased its holdings in Lam Research by 2.6% during the second quarter. State Street Corp now owns 60,704,130 shares of the semiconductor company's stock worth $26,320,468,000 after buying an additional 1,545,830 shares during the last quarter. Bank of America Corp DE grew its position in shares of Lam Research by 5.5% in the second quarter. Bank of America Corp DE now owns 11,244,147 shares of the semiconductor company's stock valued at $4,872,426,000 after purchasing an additional 584,489 shares in the last quarter. Van ECK Associates Corp lifted its holdings in Lam Research by 411.8% during the 2nd quarter. Van ECK Associates Corp now owns 11,089,395 shares of the semiconductor company's stock worth $4,805,368,000 after purchasing an additional 8,922,854 shares in the last quarter. Bank of New York Mellon Corp bought a new position in Lam Research in the 2nd quarter worth about $3,777,585,000. Finally, Amundi increased its position in shares of Lam Research by 23.7% during the first quarter. Amundi now owns 10,147,479 shares of the semiconductor company's stock valued at $2,168,107,000 after buying an additional 1,942,862 shares during the period. 84.61% of the stock is owned by hedge funds and other institutional investors.

Lam Research Company Profile

Lam Research Corporation NASDAQ: LRCX is a semiconductor equipment company that develops and manufactures systems used to fabricate integrated circuits. Its technologies support key stages of wafer processing, helping semiconductor manufacturers create the increasingly complex structures found in memory, logic and other types of chips.

The company's product portfolio includes etch systems, which selectively remove materials from wafers; deposition systems, which apply thin films; and cleaning solutions used to remove contaminants and residue during manufacturing.

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