LRCX

Lam Research Corp

TMT


Presented:10/02/2018
Price:$151.08
Cap:$23.01B
Current Price:$76.36
Cap:$98.97B

Presented

Date10/02/2018
Price$151.08
Market Cap$23.01B
Ent Value$28.19B
P/E Ratio11.36x
Book Value$41.44
Div Yield2.91%
Shares O/S152.29M
Ave Daily Vol2,729,852
Short IntN/A

Current

Price$76.36
Market Cap$98.97B
Lam Research Corp. engages in manufacturing and servicing of wafer processing semiconductor manufacturing equipment. It operates through the following geographical segments: the United States, China, Europe, Japan, Korea, Southeast Asia, and Taiwan. It offers thin film deposition, plasma etch, photoresist strip, and wafer cleaning. The company was founded by David Lam on January 21, 1980 and is headquartered in Fremont, CA.

Publicly traded companies mentioned herein: Applied Materials Inc (AMAT), Lam Research Corp (LRCX), Micron Technology Inc (MU), Samsung Electronics Co Ltd (006930 KS), SK Hynix Inc (000660 KS), (Toshiba Corp (6502 JP)

Highlights

After peaking at over $220/share in March 2018, Lam Research stock (LRCX) has declined to ~$150. The presenter is long, and sees the risk/reward as favorable for the wafer fab equipment (WFE) manufacturer given a few key assumptions about the overall health of the semiconductor equipment space. Fears about how i) total WFE spend being reduced and/ or pushed out, ii) the trajectory of memory prices (NAND and DRAM), and iii) an overall slowing of Moore’s Law impact LRCX are, in his opinion, overblown. It is understandable for semi cap equipment stocks to perform poorly in a recession scenario, but for LRCX to be down 30%, to the point where there could be ~$20/share of further downside (12x $11/share of trough annualized EPS), and $63/share of upside (12.5x $17 of calendar 2019 EPS) seems like an overreaction.

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Idea Discussion

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