Lam Research Corporation (LRCX)
Quantitative Summary
DeterministicLRCX trades at 60.3x earnings, roughly in line with its sector average of 65.0x. Financial health metrics are strong: Piotroski 7/9, Altman Z 21.5 (above 3.0 safe zone threshold). DCF fair value of $35 implies 87% downside based on model assumptions.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe company demonstrates exceptional capital efficiency, generating an ROIC of 32.8% against a WACC of 15.6%, resulting in a robust spread of +17.2%. This high return is primarily engineered through superior profitability rather than operational velocity or leverage; the DuPont decomposition reveals that while asset turnover sits at a moderate 0.86x and equity multiplier at 2.16x, net margins drive the engine with an impressive 29.1% contribution to the 54.3% ROE. Fundamental integrity metrics reinforce this quality profile, evidenced by a Piotroski F-Score of 7/9 and a significantly elevated Altman Z-Score of 18.0, which suggests low distress risk. However, the Beneish M-Score of -2.34 indicates strong earnings management indicators consistent with high-quality reporting rather than manipulation.
Valuation metrics present a distinct divergence between market pricing and intrinsic models. The current P/E multiple of 44.9x trades at a premium relative to the sector average of 42.2x, reflecting aggressive growth expectations embedded in the price. This sentiment is starkly contrasted by the DCF model, which calculates a fair value of $35, implying an -83.7% downside from current levels based on assumed cash flow trajectories. The market appears to be pricing for extreme future expansion, as indicated by the 10-year implied free cash flow growth rate of 44.2%, yet this optimism stands in tension with Fama-French factor data showing a negative profitability tilt (-0.357) and a slight value underperformance (-0.184).
Insider activity over the last 90 days reveals $29,658,952 in net selling, introducing a potential divergence between management positioning and public sentiment despite the strong fundamental backdrop. While the Fama-French alpha of 85.58% annually highlights significant outperformance relative to traditional risk factors, the combination of elevated valuation multiples, substantial DCF downside, and notable insider offloading suggests the stock carries heightened execution risk if growth assumptions fail to materialize at the required pace.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 24% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 13.6% | 15.6% | 17.6% |
|---|---|---|---|
| 2% | $39 | $33 | $28 |
| 3% | $42 | $35 | $29 |
| 4% | $45 | $37 | $31 |
Center = base case. Green = >10% upside, Red = >10% downside vs $334.41.
Pre-computed DCF: WACC=15.6%, terminal growth 3%. Fair value $35 (-87.0%). Not investment advice.
Valuation Context
Currently trading 42% below its 5-year average P/E of 93.2x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedLam Research Corporation is currently trading at $263.66, a position that requires contextual analysis against its moving average envelope to assess relative value dynamics without definitive directional bias. In the absence of specific upper and lower boundary values for the standard deviation bands or the exact placement of simple moving averages in this dataset, precise calculations regarding mean-reversion potential cannot be mathematically derived. Typically, prices trading near the outer edges of an SMA envelope suggest heightened volatility or a possible trend exhaustion where statistical reversion to the average might occur, whereas positions within the central band often indicate sustained momentum. Without knowing whether $263.66 represents an extreme deviation close to a band limit or a moderate placement in the middle zone, any assertion about imminent mean-reversion remains speculative rather than factual. The technical setup described relies entirely on the relationship between the current market price and its historical volatility bands, which are not provided here. If this price point were significantly distant from the central moving average line relative to the envelope width, it would statistically imply a higher probability of correction toward the mean over time. Conversely, if the price sits comfortably within the inner half of the envelope structure, the data suggests continued adherence to the prevailing trend rather than an immediate reversal signal. Investors must evaluate where this specific valuation level resides within the unprovided statistical boundaries to determine if the asset is currently in a state of potential oversupply relative to recent averages or still aligned with its established trajectory.
Quant Health Deep Dive
Profitability & Value Creation
✅ Conservative payout — room for dividend increases.
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Dividend History
| Date | Amount | Change |
|---|---|---|
| 2026-03-04 | $0.2600 | 0.0% |
| 2025-12-03 | $0.2600 | 0.0% |
| 2025-09-24 | $0.2600 | +13.0% |
| 2025-06-18 | $0.2300 | 0.0% |
| 2025-03-05 | $0.2300 | 0.0% |
| 2024-12-11 | $0.2300 | 0.0% |
| 2024-09-17 | $0.2300 | +15.0% |
| 2024-06-18 | $0.2000 | 0.0% |
| 2024-03-12 | $0.2000 | 0.0% |
| 2023-12-12 | $0.2000 | 0.0% |
| 2023-09-12 | $0.2000 | +15.9% |
| 2023-06-13 | $0.1725 | 0.0% |
Dividend and split data from SEC filings and market data. Amounts are per share, not adjusted for splits. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
10-K Risk Factor Expansion
Word count of Item 1A (Risk Factors) across annual filings. Rising counts often signal new regulatory, competitive, or operational risks.
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like SMH or XNTK, the fund manager is mechanically forced to buy or sell LRCX shares regardless of Lam Research Corporation's individual fundamentals. We estimate $47.9B of passive capital is structurally linked to LRCX through 8 tracked ETFs. This substantial passive exposure means that ETF inflows and outflows — not company fundamentals — can dominate daily volume on this stock.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in Lam Research Corporation to visualize passive redemption contagion across ETFs and collateral stocks.
If Lam Research Corporation (LRCX) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies NVIDIA Corp (NVDA) as the most exposed collateral stock, sharing 2 ETFs with LRCX. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 37 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
LRCX Ownership Dynamics
Passive funds hold 1 in every 6 LRCX shares, reducing daily market volatility.
Lam Research Corporation (LRCX) exerts notable gravity on the passive index market, currently representing 4.7% of the VanEck Semiconductor ETF (SMH) and 4.3% of the XNTK (XNTK). Across 34 tracked ETFs, approximately 206M shares (16.4% of float) are held by passive funds and rarely trade on the open market. This level of passive ownership means index rebalances can create outsized volume events.
ETFs with Highest LRCX Exposure
Float lock-up computed from 34 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
LRCX Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for Lam Research Corporation over the past year sits near $99.03 (20% of 252-day volume). The current price of $334.41 trades 237.7% above this institutional floor — a sign of upside momentum, though a pullback to the POC zone is a common reversion target. The highly concentrated volume profile (20% at POC) indicates strong consensus on fair value — institutional participants have repeatedly transacted near this price.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
LRCX Capital Efficiency
How efficiently does Lam Research Corporation convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
Lam Research Corporation converts 83% of its EBITDA into free cash flow, an exceptional conversion rate indicating an asset-light business model with minimal capital reinvestment drag. The positive ROIC-WACC spread of 17.2% confirms that reinvested capital creates shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-11 | 7,703 | $294.05 | $2.3M |
| 2026-05-07 | 82 | $297.17 | $24,367.94 |
| 2026-05-04 | 3 | $256.72 | $770.16 |
| 2026-05-01 | 2 | $257.86 | $515.72 |
| 2026-04-30 | 10 | $248.75 | $2,487.5 |
| 2026-04-29 | 2 | $251.23 | $502.46 |
| 2026-04-27 | 600 | $267.78 | $160,668 |
| 2026-04-23 | 2 | $265.55 | $531.1 |
| 2026-04-20 | 800 | $267.60 | $214,080 |
| 2026-04-17 | 2 | $260.96 | $521.92 |
| 2026-04-15 | 8 | $272.41 | $2,179.28 |
| 2026-04-13 | 25,000 | $263.66 | $6.6M |
| 2026-04-07 | 27 | $220.65 | $5,957.55 |
| 2026-04-06 | 86 | $218.44 | $18,785.84 |
| 2026-04-02 | 8 | $222.01 | $1,776.08 |
| 2026-03-25 | 125 | $238.84 | $29,855 |
| 2026-03-24 | 1,682 | $233.31 | $392,427.42 |
| 2026-03-23 | 12,703 | $228.36 | $2.9M |
| 2026-03-20 | 9,813 | $233.99 | $2.3M |
| 2026-03-19 | 14,701 | $224.71 | $3.3M |
| 2026-03-18 | 503 | $226.47 | $113,914.41 |
| 2026-03-17 | 98 | $219.40 | $21,501.2 |
| 2026-03-13 | 11,010 | $209.49 | $2.3M |
| 2026-03-11 | 287 | $215.23 | $61,771.01 |
| 2026-03-09 | 52,306 | $199.33 | $10.4M |
| 2026-03-02 | 4,147 | $233.89 | $969,941.83 |
| 2026-02-27 | 2,439 | $239.07 | $583,091.73 |
| 2026-02-25 | 9,489 | $244.25 | $2.3M |
| 2026-02-24 | 10,532 | $242.27 | $2.6M |
| 2026-02-23 | 9,468 | $244.92 | $2.3M |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
SEC Comment Letters
SEC correspondence with the company regarding their filings. Comment letters often flag disclosure deficiencies, accounting concerns, or material omissions.
Source: SEC EDGAR correspondence. Comment letters are public records of SEC staff review of company filings.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| KLAC | 0.871 | 0.870 | High co-movement |
| AMAT | 0.868 | 0.880 | High co-movement |
| ASML | 0.805 | 0.847 | High co-movement |
| USN070592100 | 0.805 | 0.847 | High co-movement |
| MU | 0.745 | 0.744 | High co-movement |
| MPWR | 0.726 | 0.781 | High co-movement |
| TSM | 0.717 | 0.758 | High co-movement |
| TER | 0.645 | 0.704 | Moderate |
| ETN | 0.629 | 0.680 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare LRCX to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.