Lam Research (NASDAQ:LRCX) Shares Gap Down - Time to Sell?

Key Points

• Lam Research shares fell sharply, opening at $275 after closing at $298.22, and last traded near $278.87. The stock is below its 50-day and 200-day moving averages.
• Despite the decline, analysts maintain a “Moderate Buy” consensus with an average price target of $361.81, although several firms recently lowered their targets.
• Lam Research reported better-than-expected quarterly results, with $1.82 adjusted EPS and $6.72 billion in revenue, while revenue rose 30% year over year. The company also increased its quarterly dividend to $0.33 per share, but insiders sold approximately $10.6 million of stock over the past three months.

Lam Research Corporation (NASDAQ:LRCX - Get Free Report) gapped down prior to trading on Monday . The stock had previously closed at $298.22, but opened at $275.00. Lam Research shares last traded at $278.8740, with a volume of 1,428,119 shares.

Analysts Set New Price Targets

Several equities analysts recently commented on the company. Wells Fargo & Company restated an "overweight" rating and set a $350.00 target price (down from $450.00) on shares of Lam Research in a research report on Thursday, July 30th. Berenberg Bank set a $420.00 price target on Lam Research in a report on Wednesday, September 9th. Morgan Stanley dropped their price target on Lam Research from $404.00 to $367.00 and set an "overweight" rating for the company in a research report on Thursday, July 30th. Raymond James Financial set a $425.00 price objective on Lam Research in a report on Wednesday, June 10th. Finally, HSBC reaffirmed a "hold" rating and issued a $333.00 target price on shares of Lam Research in a research note on Monday, July 27th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-six have issued a Buy rating and five have issued a Hold rating to the company's stock. According to MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and an average price target of $361.81.

Lam Research Stock Performance

The company has a 50 day simple moving average of $313.37 and a 200-day simple moving average of $294.18. The company has a debt-to-equity ratio of 0.30, a current ratio of 2.63 and a quick ratio of 1.91. The stock has a market cap of $346.51 billion, a P/E ratio of 48.14, a price-to-earnings-growth ratio of 1.18 and a beta of 1.85.

Lam Research (NASDAQ:LRCX - Get Free Report) last announced its quarterly earnings data on Wednesday, July 29th. The semiconductor company reported $1.82 earnings per share for the quarter, beating analysts' consensus estimates of $1.69 by $0.13. The company had revenue of $6.72 billion for the quarter, compared to analysts' expectations of $6.66 billion. Lam Research had a return on equity of 67.60% and a net margin of 31.27%.Lam Research's revenue for the quarter was up 30.0% compared to the same quarter last year. During the same period last year, the firm posted $1.33 EPS. Lam Research has set its Q1 2027 guidance at 2.000-2.300 EPS. On average, equities analysts expect that Lam Research Corporation will post 9.33 earnings per share for the current fiscal year.

Lam Research Increases Dividend

The business also recently declared a quarterly dividend, which will be paid on Wednesday, October 14th. Shareholders of record on Wednesday, September 23rd will be paid a $0.33 dividend. This is an increase from Lam Research's previous quarterly dividend of $0.26. The ex-dividend date of this dividend is Wednesday, September 23rd. This represents a $1.32 dividend on an annualized basis and a yield of 0.5%. Lam Research's payout ratio is presently 18.06%.

Insider Activity at Lam Research

In other news, Director Abhijit Talwalkar sold 18,282 shares of the company's stock in a transaction dated Monday, July 13th. The shares were sold at an average price of $335.00, for a total transaction of $6,124,470.00. Following the completion of the transaction, the director directly owned 87,142 shares of the company's stock, valued at approximately $29,192,570. This represents a 17.34% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Bethany Mayer sold 9,557 shares of the company's stock in a transaction that occurred on Wednesday, September 9th. The shares were sold at an average price of $314.74, for a total value of $3,007,970.18. Following the transaction, the director directly owned 20,995 shares of the company's stock, valued at $6,607,966.30. The trade was a 31.28% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold 32,839 shares of company stock worth $10,644,740 in the last three months. 0.31% of the stock is owned by insiders.

Institutional Trading of Lam Research

A number of institutional investors and hedge funds have recently bought and sold shares of the company. Bayban bought a new position in Lam Research during the 4th quarter valued at about $26,000. Vermillion Wealth Management Inc. purchased a new position in shares of Lam Research during the first quarter valued at approximately $26,000. Cedar Mountain Advisors LLC lifted its holdings in shares of Lam Research by 242.9% during the 1st quarter. Cedar Mountain Advisors LLC now owns 120 shares of the semiconductor company's stock valued at $26,000 after buying an additional 85 shares during the period. Paladin Partners LLC bought a new position in Lam Research in the second quarter valued at about $26,000. Finally, Mcguire Capital Advisors Inc. purchased a new position in shares of Lam Research in the fourth quarter worth approximately $27,000. 84.61% of the stock is currently owned by institutional investors.

Lam Research Company Profile

Lam Research Corporation is a semiconductor equipment company that develops and manufactures systems used in the fabrication of integrated circuits. Its equipment supports key wafer-processing steps, including deposition, etch, wafer cleaning, and related processes used to create and connect the microscopic features found on semiconductor devices.

The company serves semiconductor manufacturers producing a range of products, including memory, logic, and specialty chips. In addition to manufacturing equipment, Lam Research provides installation, maintenance, spare parts, upgrades, technical support, and other services intended to help customers operate and improve their fabrication facilities.

Founded in 1980, Lam Research is headquartered in Fremont, California, and serves customers through a global network of offices, engineering facilities, and support operations.

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