Lam Research Corporation (LRCX)
This past week on July 29th LRCX released their Q4 2015
earnings report. LRCX reported fourth-quarter fiscal 2015 non-GAAP earnings of
$1.50 per share, which beat consensus by about 3 cents. Revenues of $1.48 billion increased 18.6% year
over year. Revenues also beat the consensus estimates of $1.44 billion. This
was the eighth successive quarter in which the company generated revenues in
excess of a billion. The stock price initially responded positively, but has
since lost all of the post announcement gains. The current stock price is
$76.22 which is below our purchase price. In light of the positive earnings
release I decreased some of the assumption percentages in the model, due to the
great uncertainty surrounding the semiconductor industry. For example, there
has been great consolidation through mergers and acquisitions in this industry,
which increased the harshness of competition and the need to stay profitable
and lean. Also, the future in general of the semiconductor industry is in
question as no one knows what type of technology will be used next. Since LRCX
manufactures and services semiconductor equipment, if they choose the wrong
equipment, they could lose their market share in the industry. The price target
before the Q4 update was $96.55, now the current price target is $87.66.
Jeff Sherman
No comments:
Post a Comment