Lam Research (NASDAQ:LRCX) Stock Falls 4.8% - Here's What Happened

Key Points

• Lam Research shares fell 4.8% to $227.56 in heavy trading, well below its 50-day and 200-day moving averages of $294.47 and $283.78, respectively.
• Analyst sentiment remains generally positive, with 26 Buy ratings and six Holds producing a “Moderate Buy” consensus and an average price target of $360.23, though Zacks Research downgraded the stock to Hold.
• The company recently exceeded quarterly expectations, reporting $2.20 in EPS and $8.22 billion in revenue, while increasing its quarterly dividend to $0.33 per share. Revenue rose 54.4% year over year.

Lam Research Corporation (NASDAQ:LRCX - Get Free Report) shares fell 4.8% on Monday. The company traded as low as $224.58 and last traded at $227.56. 11,324,814 shares changed hands during trading, an increase of 5% from the average session volume of 10,794,470 shares. The stock had previously closed at $239.11.

Analysts Set New Price Targets

LRCX has been the topic of several recent analyst reports. Evercore set a $315.00 price objective on shares of Lam Research in a report on Tuesday, October 20th. Zacks Research lowered shares of Lam Research from a "strong-buy" rating to a "hold" rating in a research note on Thursday, October 22nd. Berenberg Bank set a $420.00 price objective on shares of Lam Research in a report on Wednesday, September 9th. HSBC reaffirmed a "hold" rating and set a $333.00 target price on shares of Lam Research in a research note on Monday, July 27th. Finally, Deutsche Bank Aktiengesellschaft reiterated a "buy" rating and set a $375.00 target price on shares of Lam Research in a report on Monday, October 19th. Twenty-six analysts have rated the stock with a Buy rating and six have given a Hold rating to the company's stock. Based on data from MarketBeat.com, Lam Research has an average rating of "Moderate Buy" and an average target price of $360.23.

Lam Research Price Performance

The stock's 50 day moving average is $294.47 and its two-hundred day moving average is $283.78. The stock has a market capitalization of $284.26 billion, a PE ratio of 33.91, a price-to-earnings-growth ratio of 0.89 and a beta of 1.97. The company has a debt-to-equity ratio of 0.27, a current ratio of 2.48 and a quick ratio of 1.86.

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

Lam Research Increases Dividend

The firm also recently declared a quarterly dividend, which was paid on Wednesday, October 14th. Shareholders of record on Wednesday, September 23rd were issued a dividend of $0.33 per share. This is a positive change from Lam Research's previous quarterly dividend of $0.26. The ex-dividend date of this dividend was Wednesday, September 23rd. This represents a $1.32 dividend on an annualized basis and a yield of 0.6%. Lam Research's dividend payout ratio (DPR) is presently 19.67%.

Insider Activity

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

Institutional Trading of Lam Research

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in LRCX. Paladin Partners LLC acquired a new stake in Lam Research during the 2nd quarter worth $26,000. William Mack & Associates Inc. acquired a new position in Lam Research in the third quarter valued at $25,000. Dakota Community Bank & Trust NA purchased a new position in shares of Lam Research during the third quarter worth about $33,000. Quintet Private Bank Europe S.A. increased its position in shares of Lam Research by 100.0% during the third quarter. Quintet Private Bank Europe S.A. now owns 100 shares of the semiconductor company's stock worth $33,000 after purchasing an additional 50 shares in the last quarter. Finally, Bravera Wealth purchased a new stake in shares of Lam Research in the 2nd quarter valued at about $46,000. Institutional investors and hedge funds own 84.61% of the company's stock.

About Lam Research

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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