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Understanding Lam Research's Position In Semiconductors & Semiconductor Equipment Industry Compared To Competitors

Published 12/02/2024, 16:00
Updated 12/02/2024, 17:10
© Reuters.  Understanding Lam Research's Position In Semiconductors & Semiconductor Equipment Industry Compared To Competitors

Benzinga - by Benzinga Insights, Benzinga Staff Writer.

In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating Lam Research (NASDAQ:LRCX) against its key competitors in the Semiconductors & Semiconductor Equipment industry. By analyzing important financial metrics, market position, and growth prospects, we aim 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.

CompanyP/EP/BP/SROEEBITDA (in billions)Gross Profit (in billions)Revenue Growth
Lam Research Corp35.1714.548.5211.73%$1.22$1.76-28.79%
ASML Holding NV44.3025.8512.6016.1%$2.6$3.728.45%
Applied Materials Inc22.929.465.9212.75%$2.36$3.17-0.39%
KLA Corp32.9028.879.2319.31%$0.86$1.51-16.66%
Entegris Inc95.425.665.220.99%$0.2$0.37-10.62%
Enphase Energy Inc39.7616.907.662.09%$0.04$0.15-45.1%
Teradyne Inc37.486.196.284.71%$0.16$0.38-4.71%
Amkor Technology Inc21.371.941.193.01%$0.33$0.28-3.84%
SolarEdge Technologies Inc21.021.771.30-2.44%$-0.0$0.14-13.32%
Axcelis Technologies Inc16.864.733.678.53%$0.09$0.146.14%
FormFactor Inc40.903.685.068.67%$0.01$0.07-1.99%
Kulicke & Soffa Industries Inc55.702.433.900.8%$0.02$0.08-2.86%
Photronics Inc16.042.092.254.61%$0.1$0.088.18%
Veeco Instruments Inc33.152.982.993.99%$0.03$0.083.17%
Cohu Inc31.811.732.400.41%$0.02$0.07-27.04%
PDF Solutions Inc482.575.837.89-2.23%$0.0$0.036.25%
ACM Research Inc16.971.522.393.61%$0.03$0.0926.07%
Aehr Test Systems24.245.706.257.28%$0.01$0.0144.66%
inTest Corp11.361.521.053.18%$0.0$0.026.15%
Average58.047.164.855.3%$0.38$0.58-0.97%
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.dividend-frequency { font-size: 12px; color: #6c757d; } Upon a comprehensive analysis of Lam Research, the following trends can be discerned:

  • With a Price to Earnings ratio of 35.17, which is 0.61x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.

  • With a Price to Book ratio of 14.54, which is 2.03x the industry average, Lam Research might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.

  • The stock's relatively high Price to Sales ratio of 8.52, surpassing the industry average by 1.76x, may indicate an aspect of overvaluation in terms of sales performance.

  • The Return on Equity (ROE) of 11.73% is 6.43% 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 3.21x above the industry average, implying stronger profitability and robust cash flow generation.

  • Compared to its industry, the company has higher gross profit of $1.76 Billion, which indicates 3.03x above the industry average, indicating stronger profitability and higher earnings from its core operations.

  • The company's revenue growth of -28.79% is significantly lower compared to the industry average of -0.97%. This indicates a potential fall in the company's sales performance.

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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.

By analyzing Lam Research in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:

  • 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.

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

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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