In-Depth Analysis: Lam Research Versus Competitors In Semiconductors & Semiconductor Equipment Industry

In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing Lam Research LRCX alongside its primary competitors in the Semiconductors & Semiconductor Equipment industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer valuable insights to 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 33.96 15.07 8.62 11.89% $1.23 $1.8 -1.96%
ASML Holding NV 47.14 24.35 12.84 8.98% $1.61 $2.7 -21.59%
Applied Materials Inc 24.57 9.96 6.64 11.95% $2.45 $3.2 -0.47%
KLA Corp 37.62 31.26 10.24 19.6% $0.88 $1.37 -2.99%
Entegris Inc 64.07 5.89 6.02 1.32% $0.2 $0.35 -16.41%
Teradyne Inc 46.37 7.44 7.49 2.53% $0.1 $0.34 -2.87%
Enphase Energy Inc 59.33 16.97 8.86 -1.69% $0.01 $0.12 -63.73%
Onto Innovation Inc 84.82 5.91 12.61 1.77% $0.04 $0.11 -13.59%
Amkor Technology Inc 21.30 1.99 1.25 1.48% $0.23 $0.2 -22.05%
FormFactor Inc 42.19 4.63 6.53 8.67% $0.01 $0.06 1.31%
Axcelis Technologies Inc 14.99 4.09 3.32 5.84% $0.06 $0.12 -0.65%
SolarEdge Technologies Inc 100.02 1.43 1.15 -6.62% $-0.18 $-0.06 -64.52%
Photronics Inc 13.09 1.80 2.01 2.62% $0.07 $0.08 2.48%
ACM Research Inc 23.92 2.24 3.23 2.37% $0.03 $0.08 56.92%
PDF Solutions Inc 404 5.42 7.59 0.39% $0.0 $0.03 1.49%
Aehr Test Systems 22.40 3.89 4.81 -1.69% $-0.0 $0.0 -56.04%
inTest Corp 14.80 1.52 1.12 1.52% $0.0 $0.01 -13.95%
Average 63.79 8.05 5.98 3.69% $0.34 $0.54 -13.54%

By thoroughly analyzing Lam Research, we can discern the following trends:

  • The stock's Price to Earnings ratio of 33.96 is lower than the industry average by 0.53x, suggesting potential value in the eyes of market participants.

  • The elevated Price to Book ratio of 15.07 relative to the industry average by 1.87x suggests company might be overvalued based on its book value.

  • With a relatively high Price to Sales ratio of 8.62, which is 1.44x the industry average, the stock might be considered overvalued based on sales performance.

  • The company has a higher Return on Equity (ROE) of 11.89%, which is 8.2% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

  • With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.23 Billion, which is 3.62x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.

  • Compared to its industry, the company has higher gross profit of $1.8 Billion, which indicates 3.33x above the industry average, indicating stronger profitability and higher earnings from its core operations.

  • The company is experiencing remarkable revenue growth, with a rate of -1.96%, outperforming the industry average of -13.54%.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its equity.

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:

  • In the context of the debt-to-equity ratio, Lam Research holds a middle position among its top 4 peers.

  • This indicates a moderate level of debt relative to its equity with a debt-to-equity ratio of 0.62, which implies a relatively balanced financial structure with a reasonable debt-equity mix.

Key Takeaways

For Lam Research in the Semiconductors & Semiconductor Equipment industry, the PE, PB, and PS ratios indicate that the company is undervalued compared to its peers. In terms of ROE, EBITDA, gross profit, and revenue growth, Lam Research outperforms its industry counterparts, showcasing strong financial health and growth potential.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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