A strong stock as of late has been Lam Research (LRCX). Shares have been marching higher, with the stock up 38% over the past month. The stock hit a new 52-week high of $134.21 in the previous session. Lam Research has gained 85.4% since the start of the year compared to the 22.1% gain for the Zacks Computer and Technology sector and the 32.1% return for the Zacks Electronics - Semiconductors industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on July 30, 2025, Lam Research reported EPS of $1.33 versus consensus estimate of $1.2 while it beat the consensus revenue estimate by 3.64%.
For the current fiscal year, Lam Research is expected to post earnings of $4.5 per share on $19.98 in revenues. This represents a 8.7% change in EPS on a 8.4% change in revenues. For the next fiscal year, the company is expected to earn $4.97 per share on $21.67 in revenues. This represents a year-over-year change of 10.49% and 8.43%, respectively.
Valuation Metrics
Lam Research may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Lam Research has a Value Score of D. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 29.7X current fiscal year EPS estimates, which is not in-line with the peer industry average of 37.5X. On a trailing cash flow basis, the stock currently trades at 30X versus its peer group's average of 20.6X. Additionally, the stock has a PEG ratio of 1.63. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this is even more important than the company's VGM Score. Fortunately, Lam Research currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Lam Research meets the list of requirements. Thus, it seems as though Lam Research shares could still be poised for more gains ahead.
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Lam Research Corporation (LRCX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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