Lam Research (NASDAQ:LRCX) Shares Up 10.4% - What's Next?

Key Points

• Lam Research shares jumped 10.4% to $221.31 in heavy trading, with volume 52% above its average.
• The company’s latest quarter modestly beat estimates: EPS was $2.20 versus $2.18 expected, while revenue of $8.22 billion exceeded the $8.14 billion consensus and rose 54.4% year over year.
• Analysts’ consensus rating is Moderate Buy, with an average price target of $357.57. Lam also authorized up to $25 billion in share repurchases and declared a $0.33 quarterly dividend.

Lam Research Corporation (NASDAQ:LRCX - Get Free Report) shot up 10.4% during trading on Monday. The stock traded as high as $222.64 and last traded at $221.31. Approximately 16,664,496 shares changed hands during trading, an increase of 52% from the average daily volume of 10,967,746 shares. The stock had previously closed at $200.44.

Analyst Ratings Changes

LRCX has been the topic of several recent research reports. B. Riley Financial dropped their price objective on shares of Lam Research from $338.00 to $310.00 and set a "buy" rating on the stock in a report on Monday. Wall Street Zen upgraded shares of Lam Research from a "hold" rating to a "buy" rating in a research report on Saturday, October 24th. Weiss Ratings lowered shares of Lam Research from a "buy (b)" rating to a "buy (b-)" rating in a report on Friday, September 4th. Jefferies Financial Group set a $335.00 price target on Lam Research and gave the stock a "buy" rating in a research report on Thursday, July 30th. Finally, Fundamental Research set a $390.00 price target on Lam Research in a research report on Thursday, October 1st. Twenty-six investment analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the company. Based on data from MarketBeat, Lam Research currently has a consensus rating of "Moderate Buy" and a consensus target price of $357.57.

Lam Research Stock Up 10.4%

The company has a debt-to-equity ratio of 0.27, a quick ratio of 1.86 and a current ratio of 2.48. The firm has a market cap of $276.45 billion, a price-to-earnings ratio of 32.98, a PEG ratio of 0.74 and a beta of 1.97. The business's 50 day moving average price is $284.37 and its 200 day moving average price is $283.67.

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

Lam Research Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Wednesday, January 6th. Investors of record on Wednesday, December 2nd will be paid a $0.33 dividend. This represents a $1.32 annualized dividend and a dividend yield of 0.6%. The ex-dividend date is Wednesday, December 2nd. Lam Research's payout ratio is currently 19.67%.

Lam Research declared that its board has authorized a share repurchase program on Thursday, November 5th that allows the company to repurchase $25 billion in outstanding shares. This repurchase authorization allows the semiconductor company to purchase up to 9% of its stock through open market purchases. Share repurchase programs are often an indication that the company's board of directors believes its shares are undervalued.

Insider Buying and Selling

In other news, Director Bethany Mayer sold 9,557 shares of the 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 $6,607,966.30. This trade represents a 31.28% decrease in their position. The sale was disclosed in a filing with the SEC, which is available at the SEC website. Also, insider Ava Harter sold 5,000 shares of Lam Research stock in a transaction on Monday, August 31st. The shares were sold at an average price of $302.46, for a total transaction of $1,512,300.00. Following the completion of the sale, the insider directly owned 42,462 shares in the company, valued at $12,843,056.52. This represents a 10.53% 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 have sold 14,573 shares of company stock worth $4,523,606 in the last quarter. 0.31% of the stock is currently owned by company insiders.

Institutional Trading of Lam Research

A number of institutional investors and hedge funds have recently modified their holdings of LRCX. SGL Investment Advisors Inc. boosted its holdings in Lam Research by 3.6% during the third quarter. SGL Investment Advisors Inc. now owns 16,323 shares of the semiconductor company's stock worth $5,362,000 after buying an additional 574 shares in the last quarter. Virtus Advisers LLC grew its position in Lam Research by 5.8% during the third quarter. Virtus Advisers LLC now owns 9,309 shares of the semiconductor company's stock worth $3,058,000 after buying an additional 512 shares during the period. AlTi Global Inc. increased its holdings in Lam Research by 21.7% in the third quarter. AlTi Global Inc. now owns 3,127 shares of the semiconductor company's stock valued at $1,028,000 after buying an additional 558 shares in the last quarter. Phoenix Financial Ltd. increased its holdings in Lam Research by 114.5% in the third quarter. Phoenix Financial Ltd. now owns 16,621 shares of the semiconductor company's stock valued at $5,460,000 after buying an additional 8,872 shares in the last quarter. Finally, Danske Bank A S lifted its position in shares of Lam Research by 7.6% during the 3rd quarter. Danske Bank A S now owns 1,026,589 shares of the semiconductor company's stock valued at $337,245,000 after acquiring an additional 72,410 shares during the period. Hedge funds and other institutional investors own 84.61% of the company's stock.

About Lam Research

Lam Research is a global supplier of equipment and services used to manufacture semiconductors. Its products help chipmakers create and process the microscopic structures that form integrated circuits.

The company's wafer fabrication equipment is used for processes including etch, thin-film deposition and wafer cleaning. Lam also provides services such as equipment maintenance, upgrades, spare parts and other support for chip manufacturing operations.

Founded in 1980 and headquartered in Fremont, California, Lam Research serves semiconductor manufacturers around the world.

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