Lam Research Profitability Analysis
| LRCX Stock | USD 73.13 3.08 4.40% |
Net Income | First Reported 1989-09-30 | Previous Quarter 1 B | Current Value 1.1 B | Quarterly Volatility 365.9 M |
| Current Value | Last Year | Change From Last Year | 10 Year Trend | ||||||
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| Gross Profit Margin | 0.5 | 0.4732 |
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| Net Profit Margin | 0.27 | 0.2568 |
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| Operating Profit Margin | 0.3 | 0.2861 |
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| Pretax Profit Margin | 0.31 | 0.2925 |
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| Return On Assets | 0.21 | 0.2042 |
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| Return On Equity | 0.47 | 0.4482 |
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For Lam Research profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Lam Research to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Lam Research Corp utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Lam Research's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Lam Research Corp over time as well as its relative position and ranking within its peers.
Lam |
Lam Research's Revenue Breakdown by Earning Segment
Check out Correlation Analysis.
Is Semiconductors & Semiconductor Equipment space 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 0.284 | Dividend Share 0.83 | Earnings Share 3.09 | Revenue Per Share 11.925 | Quarterly Revenue Growth 0.197 |
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.
Lam Research Corp Return On Asset vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Lam Research's current stock value. Our valuation model uses many indicators to compare Lam Research value to that of its competitors to determine the firm's financial worth. Lam Research Corp is rated third overall in return on equity category among its peers. It also is rated third overall in return on asset category among its peers reporting about 0.30 of Return On Asset per Return On Equity. The ratio of Return On Equity to Return On Asset for Lam Research Corp is roughly 3.28 . At this time, Lam Research's Return On Equity is fairly stable compared to the past year. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Lam Research's earnings, one of the primary drivers of an investment's value.Lam Research's Earnings Breakdown by Geography
Lam Return On Asset vs. Return On Equity
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
Lam Research |
| = | 0.49 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Return on Asset or ROA shows how effective is the management of the company in generating income from utilizing all of the assets at their disposal. It is a useful ratio to evaluate the performance of different departments of a company as well as to understand management performance over time.
Lam Research |
| = | 0.15 |
Return on Asset measures overall efficiency of a company in generating profits from its total assets. It is expressed as the percentage of profits earned per dollar of Asset. A low ROA typically means that a company is asset-intensive and therefore will needs more money to continue generating revenue in the future.
Lam Return On Asset Comparison
Lam Research is currently under evaluation in return on asset category among its peers.
Lam Research Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Lam Research, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Lam Research will eventually generate negative long term returns. The profitability progress is the general direction of Lam Research's change in net profit over the period of time. It can combine multiple indicators of Lam Research, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
| Last Reported | Projected for Next Year | ||
| Accumulated Other Comprehensive Income | -130.4 M | -123.9 M | |
| Operating Income | 4.3 B | 4.5 B | |
| Income Before Tax | 4.4 B | 4.6 B | |
| Total Other Income Expense Net | 96.3 M | 101.1 M | |
| Net Income | 3.8 B | 4 B | |
| Income Tax Expense | 532.5 M | 559.1 M | |
| Net Income Applicable To Common Shares | 5.2 B | 5.4 B | |
| Net Income From Continuing Ops | 3.8 B | 2.2 B | |
| Non Operating Income Net Other | -59.1 M | -62 M | |
| Interest Income | 251.9 M | 264.5 M | |
| Net Interest Income | 66.7 M | 70 M | |
| Change To Netincome | 191.9 M | 146.8 M | |
| Net Income Per Share | 2.91 | 3.06 | |
| Income Quality | 1.22 | 1.28 | |
| Net Income Per E B T | 0.88 | 0.65 |
Lam Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Lam Research. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Lam Research position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Lam Research's important profitability drivers and their relationship over time.
Lam Research Profitability Trends
Lam Research profitability trend refers to the progression of profit or loss within a business. An upward trend means that Lam Research's profit has generally increased over time, and a downward profitability trend means profits are declining. Recognizing problems early in profitability trends allows investors to address revenue and cost issues in advance. Investors and analysts usually monitor three types of profitability trends: gross, operating, and net. Gross profit is the difference between revenue and costs of goods sold. Operating profit is Lam Research's gross profit minus its overhead. After you account for other unusual revenue, expenses, and costs, you get net profit. Gross profit trends are often a good indicator of future profitability. If you have high gross profit margins, you have a better chance to cover overhead and make money.
Lam Research Profitability Drivers Correlations
One of the toughest challenges investors face today is learning how to quickly synthesize and read into endless financial statements and information provided by the company, SEC reporting, and various external parties. Understanding the correlation between Lam Research different financial indicators related to revenue and profit generation helps investors identify and prioritize their investing strategies towards Lam Research in a much-optimized way. Analyzing correlations between profit drivers that are directly associated with dollar figures is the most effective way to break down Lam Research's future profitability.
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Use Lam Research in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Lam Research position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lam Research will appreciate offsetting losses from the drop in the long position's value.Lam Research Pair Trading
Lam Research Corp Pair Trading Analysis
The ability to find closely correlated positions to Lam Research could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Lam Research when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Lam Research - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Lam Research Corp to buy it.
The correlation of Lam Research is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Lam Research moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Lam Research Corp moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Lam Research can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Lam Research position
In addition to having Lam Research in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
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Additional Tools for Lam Stock Analysis
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.