Lam Research (NASDAQ:LRCX) Shares Down 16.3% – Here’s What Happened

Lam Research Corporation (NASDAQ:LRCX)’s share price fell 16.3% during trading on Thursday. The stock traded as low as $184.24 and last traded at $185.4150. Approximately 31,024,104 shares traded hands during mid-day trading, an increase of 185% from the average session volume of 10,869,987 shares. The stock had previously closed at $221.43.

Key Headlines Impacting Lam Research

Here are the key news stories impacting Lam Research this week:

• Positive Sentiment: The authorization allows Lam Research to repurchase up to about 9% of its shares. Investors may view the plan as a sign of management confidence and a potential source of support for per-share earnings. Lam Research Shares Gain on $25 Billion Buyback Authorization
• Positive Sentiment: The company also declared a quarterly dividend of $0.33 per share, payable January 6 to shareholders of record December 2. Lam Research Corporation Announces $25 Billion Share Repurchase Authorization and Declares Quarterly Dividend
• Neutral Sentiment: The buyback has drawn attention to LRCX’s significant presence in semiconductor, technology and Nasdaq-100 funds; overlapping holdings could amplify the stock’s effect on investors’ portfolios in either direction. Own a Semiconductor ETF? Lam Research’s Buyback Move Affects You
• Negative Sentiment: Broader chip-sector volatility remains a risk: recent coverage cited concerns about AI-related spending, possible capital-expenditure slowdowns, regulation and investor profit-taking. Those worries could temper gains if they persist. Chip Stocks Just Had Their Second-Worst Day on Record

Wall Street Analyst Weigh In

A number of analysts have weighed in on the stock. Stifel Nicolaus boosted their price objective on shares of Lam Research from $325.00 to $425.00 and gave the stock a “buy” rating in a research report on Friday, July 10th. Wells Fargo & Company restated an “overweight” rating and issued a $350.00 target price (down from $450.00) on shares of Lam Research in a report on Thursday, July 30th. Weiss Ratings downgraded shares of Lam Research from a “buy (b)” rating to a “buy (b-)” rating in a research report on Friday, September 4th. Citigroup reiterated a “buy” rating and set a $435.00 price target (down from $450.00) on shares of Lam Research in a research note on Thursday, October 22nd. Finally, Mizuho reduced their price target on shares of Lam Research from $365.00 to $360.00 and set an “outperform” rating for the company in a research report on Thursday, October 22nd. Twenty-six equities research analysts have rated the stock with a Buy rating and six have issued a Hold rating to the company. According to data from MarketBeat, the stock has a consensus rating of “Moderate Buy” and an average target price of $360.23.

Lam Research Price Performance

The firm has a market capitalization of $250.38 billion, a price-to-earnings ratio of 29.87, a P/E/G ratio of 0.84 and a beta of 1.97. The company has a fifty day moving average price of $284.37 and a two-hundred day moving average price of $283.67. The company has a quick ratio of 1.86, a current ratio of 2.48 and a debt-to-equity ratio of 0.27.

Lam Research (NASDAQ:LRCX) last announced its earnings results on Wednesday, October 21st. The semiconductor company reported $2.20 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $2.18 by $0.02. Lam Research had a net margin of 32.34% and a return on equity of 72.15%. The business had revenue of $8.22 billion for the quarter, compared to analyst estimates of $8.14 billion. During the same period last year, the firm posted $1.26 earnings per share. The company’s revenue for the quarter was up 54.4% compared to the same quarter last year. On average, equities research analysts expect that Lam Research Corporation will post 9.59 EPS for the current fiscal year.

Lam Research Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Wednesday, January 6th. Shareholders of record on Wednesday, December 2nd will be paid a $0.33 dividend. The ex-dividend date is Wednesday, December 2nd. This represents a $1.32 dividend on an annualized basis and a yield of 0.7%. Lam Research’s payout ratio is currently 19.67%.

Lam Research announced that its Board of Directors has approved a share repurchase plan on Thursday, November 5th that allows the company to repurchase $25 billion in shares. This repurchase authorization allows the semiconductor company to purchase up to 9% of its shares through open market purchases. Share repurchase plans are generally a sign that the company’s board believes its stock is undervalued.

Insider Transactions at Lam Research

In other news, Director Bethany Mayer sold 9,557 shares of the stock in a transaction dated Wednesday, September 9th. The shares were sold at an average price of $314.74, for a total transaction of $3,007,970.18. Following the completion of the sale, the director owned 20,995 shares in the company, valued at approximately $6,607,966.30. This represents a 31.28% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Also, insider Ava Harter sold 5,000 shares of the firm’s stock in a transaction dated Monday, August 31st. The stock was sold at an average price of $302.46, for a total value of $1,512,300.00. Following the transaction, the insider directly owned 42,462 shares in the company, valued at approximately $12,843,056.52. This represents a 10.53% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 0.31% of the stock is currently owned by corporate insiders.

Institutional Trading of Lam Research

A number of hedge funds have recently added to or reduced their stakes in LRCX. State Street Corp lifted its holdings in shares of Lam Research by 2.6% during the second quarter. State Street Corp now owns 60,704,130 shares of the semiconductor company’s stock worth $26,320,468,000 after purchasing an additional 1,545,830 shares during the period. Bank of America Corp DE increased its stake in Lam Research by 5.5% in the 2nd quarter. Bank of America Corp DE now owns 11,244,147 shares of the semiconductor company’s stock valued at $4,872,426,000 after buying an additional 584,489 shares during the period. Van ECK Associates Corp increased its stake in Lam Research by 411.8% in the 2nd quarter. Van ECK Associates Corp now owns 11,089,395 shares of the semiconductor company’s stock valued at $4,805,368,000 after buying an additional 8,922,854 shares during the period. Bank of New York Mellon Corp purchased a new position in Lam Research during the 2nd quarter worth $3,777,585,000. Finally, Amundi raised its position in Lam Research by 23.7% during the 1st quarter. Amundi now owns 10,147,479 shares of the semiconductor company’s stock worth $2,168,107,000 after buying an additional 1,942,862 shares during the last quarter. 84.61% of the stock is owned by institutional investors and hedge funds.

Lam Research Company Profile

Lam Research is a global supplier of equipment and services used to manufacture semiconductors. Its products help chipmakers create and process the microscopic structures that form integrated circuits.

The company’s wafer fabrication equipment is used for processes including etch, thin-film deposition and wafer cleaning. Lam also provides services such as equipment maintenance, upgrades, spare parts and other support for chip manufacturing operations.

Founded in 1980 and headquartered in Fremont, California, Lam Research serves semiconductor manufacturers around the world.