The Lam Research Corporation (NASDAQ:LRCX) First-Quarter Results Are Out And Analysts Have Published New Forecasts
It's been a sad week for Lam Research Corporation (NASDAQ:LRCX), who've watched their investment drop 13% to US$230 in the week since the company reported its quarterly result. Lam Research reported in line with analyst predictions, delivering revenues of US$8.2b and statutory earnings per share of US$2.19, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Lam Research after the latest results.
Taking into account the latest results, the consensus forecast from Lam Research's 29 analysts is for revenues of US$35.4b in 2027. This reflects a huge 35% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 41% to US$9.57. In the lead-up to this report, the analysts had been modelling revenues of US$34.9b and earnings per share (EPS) of US$9.41 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
View our latest analysis for Lam Research
The analysts reconfirmed their price target of US$364, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Lam Research at US$500 per share, while the most bearish prices it at US$255. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Lam Research's rate of growth is expected to accelerate meaningfully, with the forecast 50% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 6.4% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 27% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Lam Research is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Lam Research. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Lam Research analysts - going out to 2029, and you can see them free on our platform here.
Even so, be aware that Lam Research is showing 1 warning sign in our investment analysis , you should know about...
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