November 23, 2023
Top 10 Stock Lam Research Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Lam Research – Top 10 Stock in NASDAQ 100 Index
Lam Research is listed as a top 10 stock on November 23, 2023 in the market index NASDAQ 100 because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 66 (high 66% performer), Obermatt assesses an overall buy recommendation for Lam Research on November 23, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Semiconductor Equipment |
| Index | Dividends USA, Employee Focus US, Diversity USA, Human Rights, Recycling, SDG 10, SDG 13, SDG 3, SDG 4, SDG 8, NASDAQ 100, NASDAQ, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Lam Research Buy
| 360 METRICS | November 23, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 63 |
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| GROWTH | ||||||||
| GROWTH | 95 |
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| SAFETY | ||||||||
| SAFETY | 20 |
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| SENTIMENT | ||||||||
| SENTIMENT | 55 |
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| 360° VIEW | ||||||||
| 360° VIEW | 66 |
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ANALYSIS: With an Obermatt 360° View of 66 (better than 66% compared with alternatives), overall professional sentiment and financial characteristics for the stock Lam Research are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Lam Research. The consolidated Value Rank has an attractive rank of 63, which means that the share price of Lam Research is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 63% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 95, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 55. But the company’s financing is risky with a Safety rank of 20. This means 80% of comparable companies have a safer financing structure than Lam Research. ...read more
RECOMMENDATION: With a consolidated 360° View of 66, Lam Research is better positioned than 66% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 63), above-average growth (Growth Rank of 95), and positive market sentiment in the professional investor community (Sentiment Rank of 55), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 20), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Lam Research is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Lam Research positive
ANALYSIS: With an Obermatt Sentiment Rank of 55 (better than 55% compared with alternatives), overall professional sentiment and engagement for the stock Lam Research is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Lam Research. Analyst Opinions are at a rank of 50 (better than 50% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 52, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Lam Research. Finally, the Professional Investors rank is 81, which means that currently, professional investors hold more stock in this company than in 81% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 55 (more positive than 55% compared with investment alternatives), Lam Research has a reputation among professional investors that is above-average compared with that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 42, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 58% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Lam Research is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Lam Research Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 63 (better than 63% compared with alternatives), Lam Research shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Lam Research. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 89% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 33 which means that the stock price compared with what market professionals expect for future profits is higher than 67% of comparable companies, indicating a low value concerning Lam Research's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 49 which means that the stock price compared with what market professionals expect for future profit levels is higher than 51% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 9 is also low. Compared with invested capital, the stock price is higher than for 91% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 63, is a buy recommendation based on Lam Research's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Lam Research? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Lam Research only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Lam Research Growth Momentum high
| GROWTH METRICS | November 23, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 79 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 48 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 77 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 91 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 95 |
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ANALYSIS: With an Obermatt Growth Rank of 95 (better than 95% compared with alternatives) for 2023, Lam Research shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Lam Research. Sales Growth has a rank of 79 which means that currently, professionals expect the company to grow more than 79% of its competitors. Capital Growth is also above 48% of competitors with a rank of 77, and Stock Returns with the rank of 91 is also an outperformance. Only Profit Growth is low with a rank of 48 which means that currently, professionals expect the company to grow its profits less than 52% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 95, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Lam Research is a good growth stock. ...read more
Safety Strategy: Lam Research Debt Financing Safety risky
| SAFETY METRICS | November 23, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 20 |
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| REFINANCING | ||||||||
| REFINANCING | 27 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 66 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 20 |
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ANALYSIS: With an Obermatt Safety Rank of 20 (better than 20% compared with alternatives), the company Lam Research has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Lam Research is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Lam Research. Liquidity is at 66, meaning the company generates more profit to service its debt than 66% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 27, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 73% of its competitors. Leverage is also high at a rank of 20, which means that the company has an above-average debt-to-equity ratio. It has more debt than 80% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 20 (worse than 80% compared with alternatives), Lam Research has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Lam Research Above-Average Financial Performance
| COMBINED PERFORMANCE | November 23, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 63 |
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| GROWTH | ||||||||
| GROWTH | 95 |
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| SAFETY | ||||||||
| SAFETY | 66 |
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| COMBINED | ||||||||
| COMBINED | 71 |
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ANALYSIS: With an Obermatt Combined Rank of 71 (better than 71% compared with investment alternatives), Lam Research (Semiconductor Equipment, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Lam Research are a good value (attractively priced) with a consolidated Value Rank of 63 (better than 63% of alternatives), show above-average growth (Growth Rank of 95) but are riskily financed (Safety Rank of 20), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 71, is a buy recommendation based on Lam Research's financial characteristics. As the company Lam Research's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 63) and above-average growth (Obermatt Growth Rank of 95), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 20) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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