Lam Research ($LRCX) a Good Price or Good Company or Both ?
My afterthoughts to Tiger_chat 's question of whether an investor profits from a good company or a good price ?
"Why not both" I asked myself ?
Wouldn't there be more upsides comparatively speaking ?
Now that semiconductor stocks seemed to be on the up swing again, why not put $Lam Research(LRCX)$ to the test & see if it fits the bill.
Sidetrack: I have covered (1) credit cards companies, (2) EV company, (3) entertainment company (4) technology companies and (5) financial institutions; to test out this theory.
- General Motors - Click here to read. Like the post ok. Tks.
- Visa Inc - Click here to read. Like the post ok. Tks.
- Tesla - Click here to read. Like the post ok. Tks.
- Netflix Inc - Click here to read. Like the post ok. Tks.
- MasterCard - Click here to read. Like the post ok. Tks.
- Intel - Click here to read. Like the post ok. Tks.
- Microsoft - Click here to read. Like the post ok. Tks.
- JP Morgan - Click here to read. .
- $Morgan Stanley(MS)$ - Click here to read.
- American supplier of wafer fabrication equipment and related services to the semiconductor industry.
- Founded in 1980; this is a 43 years young company
- In May 1984, it IPO-ed on Nasdaq
- As it area of business is very niche, competition is almost non-existent
- Its manufacturing plants are located across 5 countries - US, Austria, Korea, Taiwan and Malaysia
- Through strategic acquisitions, it was able to grow into its current $67.71 Billion market cap
- As of 2018, it was the 2nd largest manufacturer in the Bay Area, after Tesla.
In 2022, a year where US market has been hammered by extreme volatility and ease of covid pandemic restrictions - how did Lam Research fare ?
Current stock price < 02 Feb 2022 stock price by -18.25%; resilient !
Lam Research ($LRCX) - Summary
- Revenue came in at $5.2 Billion vs $4.23 Billion (Q4 2021); thats a +22.93% gain (QoQ).
- Net income (GAAP) was $1.47 Million vs $1.19 Million (Q4 2021); thats a +23.53% gain (QoQ)
- Earnings per share (GAAP) was $10.77 vs $8.44 (Q4 2021); thats a +27.6% gain (QoQ)
- Minimal deviation for Non-GAAP earnings per share.
Lam Research - Revenue by products & Revenue by regions
- Bulk of revenue was contributed by memory chip of which non-volatile memory chips constituted 39% of the 50%.
- Next revenue generating product was the foundry businesses
- When it comes to country / region that contributes to the group's revenue, the top 3 countries are (a) China (24%), (b) Korea (20%) and (c) Taiwan (19%).
Lam Research - Other highlights
- Gross margin (non GAAP) was 45.1% vs 46.8% (Q4 2021); thats a marginal -1.7% decline (QoQ).
- Strangely enough, like other Mega cap companies, operating expenses have inflated in 2022 by +9% to $696.2 Million
- Lam Research pays a dividend of $6.90 per share.
Lam Research's CEO on Q4 2022 Results:
Given the decline in wafer fabrication equipment spending expected in calendar year 2023, we are taking proactive steps to lower our cost structure and drive efficiencies across our global footprint; while preserving critical R&D. With these actions, Lam is focused on accelerating our strategic priorities to capitalize on the semiconductor industry's long-term growth prospects... Lam Research, CEO, Timothy Archer....
.
Why Is Lam Research - Both A Good Price and Good Company ?
- As mentioned earlier, LRCX makes the very complicated machinery used by foundries like Taiwan Semiconductor Manufacturing Co. (TSM) to make the silicon for chips made by the likes of Nvidia Corp. & Apple Inc.
- While the niche business means little to no competitor; in a cyclical industry like semiconductors - it could also mean dry seasons during demand-drought periods
- Despite reporting a stellar Q4 2022 earning results, LRCX is already in the process of cutting expenses and ramping up its Research & Development to bring about "new" demands
- Based on its current price, there is still a possible potential of +18% upside to its stock price.
- Looking at its 200-day, 50-day and 20-day Moving Averages; its a "happy" ending that its current stock price is a comfortable margin +9.83% from its 20-day MA.
- Do you think Lam Research is a "Buy" now before the semiconductor industry picks up momentum ?
- Do you think there is any upside to Lam Research in 2023 ?
Please "LIKe" this post ok. Thanks. The rating is very important to me.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Tks for reading my post.
Pls "" LIKe" it ok. Tks.
The rating is very important to me. Tks tks!!