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Lam Research Corporation (LRCX) stock analysis

Lam Research slides about 45% from its high after a post-earnings drop, while growth and returns stay strong

LRCX closed at 240.85 on Oct 27, 2026, down 23.41% over one month and 45.07% below its 52-week high of 438.50, after a 12.64% drop on its Oct 21 earnings report. Fundamentals remain strong, with revenue growth of 21.37% year over year and ROIC of 87.40%. Analysts still rate it a Buy but trimmed several price targets after the report.

  • Price: 240.85
  • Market Cap (USD): $301.28B
  • P/E: 34.21×
  • Fwd P/E: 24.85×
  • Div Yield: 0.46%
  • 1Y Return: 58.79%
  • Mean Target: 359.19
  • Rating: Buy

Bull case

  • Revenue grew 21.37% year over year and 24.21% in the latest quarter, with revenue up for 3 straight quarters and operating margin of 37.58%, up 3.28% from a year earlier.
  • Forward P/E is 24.85 on next year's consensus EPS, only modestly above the industry median of 22.25, while consensus EPS growth for next year is 26.22% and the PEG is 0.95.
  • Analysts' mean price target is 359.19, 49.13% above the price, with 39 Buy, 10 Hold and 1 Sell ratings as of Oct 28, 2026.

Bear case

  • The stock fell 12.64% after the Oct 21 report despite a 0.92% EPS surprise and a 0.95% revenue surprise, and has lost 23.41% over one month.
  • Price sits below its 20-day (291.94), 50-day (298.43) and 200-day (283.72) averages, with MACD at -19.76 below its signal line of -12.57.
  • China made up 33.83% of fiscal 2026 revenue, and insiders recorded 6 sales and no buys in 90 days, net -38.2M.

What to watch

  • Reclaim of the 10-day average (256.34) and then the 200-day average (283.72) versus the 20-day low of 225.14.
  • The 52-week low of 135.50 and 52-week high of 438.50 mark the outer range; the 20-day low of 225.14 is the nearest support.
  • Next earnings date is not in the facts; the 30-day option expiry on Nov 27, 2026 does not include earnings.
  • Short interest, last 28.3M shares (2.26% of float) on Oct 15, 2026, up 9.74%.

General

Lam Research makes semiconductor fabrication equipment and is one of the largest US tech companies by value. Business results are strong, but the share price has dropped sharply since June. Analysts remain positive while cutting targets.

Business

Per its profile, Lam Research, founded in 1980 and based in Fremont, California, designs, makes, refurbishes and services equipment used to fabricate integrated circuits. In fiscal 2026, Systems were 64.07% of revenue and Customer Support and Other 35.93%. Market cap is $301.28B.

Recent performance

TTM revenue is $26.53B with net income of 8.81B and EPS of 7.00. The latest quarter (ended Sep 30, 2026) had revenue of 7.26B versus 6.73B in the prior quarter. Despite this, the stock fell 12.64% after the Oct 21 report.

Valuation and sentiment

Trailing P/E is 34.21 and forward P/E is 24.85 (on next year's consensus EPS), in the 59th percentile of US Technology versus a sector median of 21.60. Analysts' mean target is 359.19; several firms cut targets on Oct 20-22, including Needham to 290 from 390.

Long-term investor

Returns on capital are exceptional and the balance sheet holds net cash, while the multiple has compressed with the price. Longer-run growth has been uneven, and insiders have been sellers.

Growth and margins

Revenue grew at an 8.05% three-year and 5.94% five-year CAGR, below the current 21.37% annual pace. Annual EPS rose from 2.9 (fiscal 2023) to 5.76. Operating margin is 37.58% (88th percentile in the sector) and ROIC is 87.40% (91st percentile).

Balance sheet and cash returns

Cash is 6.57B against 3.30B of debt, giving net debt of -3.27B. Fiscal 2026 buybacks were 3.85B and dividends 1.27B. The dividend yield is 0.46% with a 15.86% payout ratio and 11 years of growth.

Valuation, estimates and ownership

Forward P/E is 24.85 versus the industry median of 22.25; FCF yield is 2.06%. Consensus EPS is 9.69 for this fiscal year and 12.23 for next. Institutional ownership is 86.52%; insiders had 6 sales and no buys in 90 days, including CEO sales through Oct 23, 2026.

Swing trader

The trend is down, with price below all key averages and RSI near oversold, but the last three sessions have bounced off 225.14. Volatility is very high.

Trend and momentum

At 240.85, price is 17.50% below the 20-day average, 19.30% below the 50-day and 15.11% below the 200-day. RSI(14) is 31.07, MACD is below its signal, ADX is 29.15 and Stochastic K is 14.73. The 5-day return is -8.58%.

Recent sessions and levels

After the 230.15 close on Oct 22 on 23.0M shares, price closed at 230.10, 237.50 and 240.85. The Oct 23 low of 225.14 is nearby support; the 10-day average is 256.34 and the 20-day average is 291.94.

Risk and flow

ATR(14) is 14.17, or 5.88% of price. Relative strength rating is 80. Short interest was 28.3M shares (2.26% of float) on Oct 15, up 9.74%. No upgrades or downgrades occurred in 30 days, though several targets were cut.

Options

Implied volatility is moderate relative to its own history and slightly below realized volatility, with a flat term structure and liquid contracts.

Volatility level

IV30 is 52.85%, an IV rank of 23 and IV percentile of 15 over 52 weeks (range 38.15% to 101.77%). IV30 is down 11.8 points over 20 days. It trades below 30-day realized volatility of 58.62%, with an IV/HV ratio of 0.90.

Term structure and expected move

IV is 53.23% at 60 days and 53.31% at 90 days: flat. Skew at 25 delta is -0.5 points. The 7-day expected move is 7.32% (17.63) and the 30-day is 15.15% (36.49). No earnings fall before the Nov 27, 2026 expiry.

Premium and liquidity

Annualized yield on the 30-delta put at 225.00 is 41.65% and on the 30-delta call at 265.00 is 30.80%, high in absolute terms because volatility is high. Liquidity score is 96; options volume was 0.70 times its 20-day average, with a put/call volume ratio of 1.00.

Analysis written October 28, 2026 from Qanvo data as of October 27, 2026. AI-generated, for information only; not investment advice.