27% profits every 20 days?
This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.
In the ever-changing and fiercely competitive business landscape, conducting thorough company analysis is crucial for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Lam Research (NASDAQ:LRCX) and its primary competitors in the Semiconductors & Semiconductor Equipment industry. By closely examining key financial metrics, market position, and growth prospects, our aim is to provide valuable insights for investors and shed light on company's performance within the industry.
Lam Research Background
Lam Research is one of the largest semiconductor wafer fabrication equipment, or WFE, manufacturers in the world. It specializes in the market segments of deposition and etch, which entail the buildup of layers on a semiconductor and the subsequent selective removal of patterns from each layer. Lam holds the top market share in etch and holds the clear cut second share in deposition. It is more exposed to memory chipmakers for DRAM and NAND chips. It counts as top customers the largest chipmakers in the world, including TSMC, Samsung, Intel, and Micron.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Lam Research Corp | 33.48 | 13.84 | 8.11 | 11.73% | $1.22 | $1.76 | -28.79% |
| ASML Holding NV | 45.26 | 23.38 | 12.33 | 8.98% | $1.61 | $2.7 | -21.59% |
| Applied Materials Inc | 22.29 | 9.03 | 6.02 | 11.95% | $2.45 | $3.2 | -0.47% |
| KLA Corp | 32.08 | 28.15 | 9 | 19.31% | $0.86 | $1.51 | -16.66% |
| Entegris Inc | 103.37 | 5.49 | 5.31 | 1.12% | $0.19 | $0.34 | -14.14% |
| Enphase Energy Inc | 35.89 | 15.28 | 6.91 | 2.09% | $0.04 | $0.15 | -58.25% |
| Teradyne Inc | 35.82 | 5.92 | 6 | 4.71% | $0.17 | $0.38 | -8.37% |
| Onto Innovation Inc | 69.42 | 4.84 | 10.32 | 1.77% | $0.04 | $0.11 | -13.59% |
| Amkor Technology Inc | 19.85 | 1.80 | 1.10 | 3.01% | $0.33 | $0.28 | -8.1% |
| Axcelis Technologies Inc | 13.06 | 3.66 | 2.85 | 8.53% | $0.09 | $0.14 | 16.63% |
| FormFactor Inc | 38.29 | 3.42 | 4.74 | 8.67% | $0.09 | $0.07 | 1.31% |
| SolarEdge Technologies Inc | 90.80 | 1.29 | 1.05 | -6.62% | $-0.18 | $-0.06 | -64.52% |
| Kulicke & Soffa Industries Inc | 50.62 | 2.21 | 3.54 | 0.8% | $0.02 | $0.08 | -2.86% |
| Photronics Inc | 11.57 | 1.59 | 1.77 | 2.62% | $0.07 | $0.08 | 2.48% |
| ACM Research Inc | 22.19 | 2.05 | 2.99 | 2.37% | $0.03 | $0.08 | 56.92% |
| Cohu Inc | 49.29 | 1.44 | 2.19 | -0.21% | $0.01 | $0.07 | -28.19% |
| PDF Solutions Inc | 370.75 | 5 | 6.96 | 0.39% | $0.0 | $0.03 | 1.49% |
| Aehr Test Systems | 20.37 | 3.54 | 4.37 | -1.69% | $-0.0 | $0.0 | -56.04% |
| inTest Corp | 14.38 | 1.46 | 1.09 | 0.8% | $0.0 | $0.01 | -19.27% |
| Average | 58.07 | 6.64 | 4.92 | 3.81% | $0.32 | $0.51 | -12.96% |
After examining Lam Research, the following trends can be inferred:
At 33.48, the stock's Price to Earnings ratio is 0.58x less than the industry average, suggesting favorable growth potential.
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 13.84 which exceeds the industry average by 2.08x.
With a relatively high Price to Sales ratio of 8.11, which is 1.65x the industry average, the stock might be considered overvalued based on sales performance.
The Return on Equity (ROE) of 11.73% is 7.92% above the industry average, highlighting efficient use of equity to generate profits.
The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.22 Billion, which is 3.81x above the industry average, implying stronger profitability and robust cash flow generation.
With higher gross profit of $1.76 Billion, which indicates 3.45x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
With a revenue growth of -28.79%, which is much lower than the industry average of -12.96%, the company is experiencing a notable slowdown in sales expansion.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When assessing Lam Research against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
Lam Research holds a middle position in terms of the debt-to-equity ratio compared to its top 4 peers.
This indicates a balanced financial structure with a moderate level of debt and an appropriate reliance on equity financing with a debt-to-equity ratio of 0.61.
Key Takeaways
For Lam Research, the PE ratio is low compared to peers, indicating potential undervaluation. The PB and PS ratios are high, suggesting overvaluation relative to industry standards. In terms of ROE, EBITDA, and gross profit, Lam Research demonstrates strong performance compared to industry peers. However, the company's revenue growth is relatively low, lagging behind its competitors in the Semiconductors & Semiconductor Equipment sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
27% profits every 20 days?
This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.
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