Have you been paying attention to shares of Lam Research (LRCX)? Shares have been on the move with the stock up 4.2% over the past month. The stock hit a new 52-week high of $169.69 in the previous session. Lam Research has gained 133% since the start of the year compared to the 29.7% gain for the Zacks Computer and Technology sector and the 60% return for the Zacks Electronics - Semiconductors industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 22, 2025, Lam Research reported EPS of $1.26 versus consensus estimate of $1.21.
For the current fiscal year, Lam Research is expected to post earnings of $4.79 per share on $21.04 in revenues. This represents a 15.7% change in EPS on a 14.11% change in revenues. For the next fiscal year, the company is expected to earn $5.57 per share on $23.63 in revenues. This represents a year-over-year change of 16.23% and 12.33%, respectively.
Valuation Metrics
While Lam Research has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort 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. Investors should consider the style scores a valuable tool that can help you to 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 A and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 35.1X current fiscal year EPS estimates, which is not in-line with the peer industry average of 37.7X. On a trailing cash flow basis, the stock currently trades at 37.7X versus its peer group's average of 22.8X. Additionally, the stock has a PEG ratio of 1.73. 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 supersedes any trend on the style score front. Fortunately, Lam Research currently has a Zacks Rank of #2 (Buy) thanks to a solid earnings estimate revision trend.
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 have potential in the weeks and months to come.
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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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