Lam Research Corp 512807AT5 Bond
| LRCX Stock | USD 908.53 24.85 2.81% |
Lam Research Corp holds a debt-to-equity ratio of 0.675. At this time, Lam Research's Short and Long Term Debt Total is fairly stable compared to the past year. Long Term Debt is likely to rise to about 6 B in 2024, despite the fact that Net Debt is likely to grow to (278.3 M). With a high degree of financial leverage come high-interest payments, which usually reduce Lam Research's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Lam Research's liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Lam Research's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the Company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps Lam Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Lam Research's stakeholders.
For most companies, including Lam Research, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for the executing running Lam Research Corp the most critical issue when dealing with liquidity needs is whether the current assets are properly aligned with its current liabilities. If not, management will need to obtain alternative financing to ensure that there are always enough cash equivalents on the balance sheet in reserve to pay for obligations.
Price Book 15.2595 | Book Value 61.361 | Operating Margin 0.2867 | Profit Margin 0.2535 | Return On Assets 0.1353 |
Lam |
Given the importance of Lam Research's capital structure, the first step in the capital decision process is for the management of Lam Research to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of Lam Research Corp to issue bonds at a reasonable cost.
| Popular Name | Lam Research LAM RESEARCH PORATION |
| Specialization | Semiconductors & Semiconductor Equipment |
| Equity ISIN Code | US5128071082 |
| Bond Issue ISIN Code | US512807AT55 |
| S&P Rating | Others |
| Maturity Date | 15th of March 2049 |
| Issuance Date | 4th of March 2019 |
| Coupon | 4.875 % |
Lam Research Corp Outstanding Bond Obligations
| US512807AX67 | US512807AX67 | Details | |
| LAM RESEARCH PORATION | US512807AV02 | Details | |
| LAM RESEARCH PORATION | US512807AW84 | Details | |
| LAM RESEARCH PORATION | US512807AT55 | Details | |
| LAM RESEARCH PORATION | US512807AU29 | Details | |
| LAM RESEARCH PORATION | US512807AS72 | Details | |
| LAM RESH P | US512807AN85 | Details |
Understaning Lam Research Use of Financial Leverage
Lam Research financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Lam Research's total debt position, including all of outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Lam Research assets, the company is considered highly leveraged. Understanding the composition and structure of overall Lam Research debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business and if it is worth investing in it. Financial leverage can amplify the potential profits to Lam Research's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Lam Research's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets).
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt Total | 5.8 B | 6.1 B | |
| Net Debt | -293 M | -278.3 M | |
| Short Term Debt | 9.6 M | 9.1 M | |
| Long Term Debt | 5.8 B | 6 B | |
| Long Term Debt Total | 5.8 B | 3 B | |
| Short and Long Term Debt | 7.5 M | 7.1 M | |
| Net Debt To EBITDA | 0.30 | 0.28 | |
| Debt To Equity | 0.95 | 1.00 | |
| Interest Debt Per Share | 30.22 | 31.73 | |
| Debt To Assets | 0.37 | 0.39 | |
| Long Term Debt To Capitalization | 0.45 | 0.47 | |
| Total Debt To Capitalization | 0.49 | 0.51 | |
| Debt Equity Ratio | 0.95 | 1.00 | |
| Debt Ratio | 0.37 | 0.39 | |
| Cash Flow To Debt Ratio | 0.71 | 0.67 |
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Try AI Portfolio ArchitectCheck out the analysis of Lam Research Fundamentals Over Time. Note that the Lam Research Corp information on this page should be used as a complementary analysis to other Lam Research's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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When running Lam Research's price analysis, check to measure Lam Research's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Lam Research is operating at the current time. Most of Lam Research's value examination focuses on studying past and present price action to predict the probability of Lam Research's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Lam Research's price. Additionally, you may evaluate how the addition of Lam Research to your portfolios can decrease your overall portfolio volatility.
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Is Lam Research's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Lam Research. If investors know Lam will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Lam Research listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth 0.221 | Dividend Share 7.725 | Earnings Share 27.22 | Revenue Per Share 107.675 | Quarterly Revenue Growth (0.02) |
The market value of Lam Research Corp is measured differently than its book value, which is the value of Lam that is recorded on the company's balance sheet. Investors also form their own opinion of Lam Research's value that differs from its market value or its book value, called intrinsic value, which is Lam Research's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Lam Research's market value can be influenced by many factors that don't directly affect Lam Research's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Lam Research's value and its price as these two are different measures arrived at by different means. Investors typically determine if Lam Research is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Lam Research's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
What is Financial Leverage?
Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.Leverage and Capital Costs
The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.Benefits of Financial Leverage
Leverage provides the following benefits for companies:- Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
- It provides a variety of financing sources by which the firm can achieve its target earnings.
- Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.