Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Lam Research Corporation (NASDAQ: LRCX) is a global supplier of wafer fabrication equipment and services to the semiconductor industry. The Company designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. Its products and services are designed to help its customers build devices that are used in a variety of electronic products, including mobile phones, personal computers, servers, wearables, automotive vehicles, and data storage devices.

Kalkine’s Diversified Opportunities Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Stock Performance:

• The stock has corrected by 21.82% in the last three months, on the other hand a return of 5.78% on a YTD basis.
• The stock is in its upper band of its 52-week range of USD 113.00 and 52-week low price of USD 57.44. Post the announcement of FY24 results the stock has been consolidating with a mere correction of approx. 2.33%, with the current price taking support from USD 75-USD 80 key level.
• The price is currently trading between both its long-term (200-day) SMA and its short-term (50-day) SMA , with the current RSI of 53.29.

1.2 The Key Positives, Negatives, and Investment summary

1.3 Top 10 shareholders:

The top 10 shareholders together form ~3.48% of the total shareholding, signifying diverse shareholding. The Vanguard Group, Inc., and BlackRock Institutional Trust Company, N.A., are the biggest shareholders, holding the maximum stake in the company at 0.93% and 0.60%, respectively.

1.4 Key Metrics

Over the period from 2020 to 2024, Lam Research Corporation's revenue displayed a general upward trend, peaking at USD 17,429 million in 2023 before declining to USD 14,905 million in 2024. Gross profit also saw a rise from USD 4,609 million in 2020 to USD 7,872 million in 2022, followed by a slight decrease to USD 7,096 million in 2024. The gross margin remained relatively stable, starting at 45.88% in 2020, with slight fluctuations, reaching 47.61% in 2024, indicating an improvement in profitability despite the recent revenue decline.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of FY24:

Section 3: Key Risks & Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Stock Performance:

• The stock has corrected by 21.82% in the last three months, on the other hand a return of 5.78% on a YTD basis.
• The stock is in its upper band of its 52-week range of USD 113.00 and 52-week low price of USD 57.44. Post the announcement of FY24 results the stock has been consolidating with a mere correction of approx. 2.33%, with the current price taking support from USD 75-USD 80 key level.
• The price is currently trading between both its long-term (200-day) SMA and its short-term (50-day) SMA , with the current RSI of 53.29.

 4.2 Fundamental Valuation

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is October 10, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.