Semiconductors · NASDAQ
Current Price
$248.75
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Lam Research Corporation with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. The company offers ALTUS systems to deposit conformal films for tungsten metallization applications; SABRE electrochemical deposition products for copper interconnect transition that offers copper damascene manufacturing; SOLA ultraviolet thermal processing products for film treatments; and VECTOR plasma-enhanced CVD ALD products. It also provides SPEED gapfill high-density plasma chemical vapor deposition products; and Striker single-wafer atomic layer deposition products for dielectric film solutions. In addition, the company offers Flex for dielectric etch applications; Kiyo for conductor etch applications; Syndion for through-silicon via etch applications; and Versys metal products for metal etch processes. Further, it provides Coronus bevel clean products to enhance die yield; Da Vinci, DV-Prime, EOS, and SP series products to address various wafer cleaning applications; and Metryx mass metrology systems for high precision in-line mass measurement in semiconductor wafer manufacturing. The company sells its products and services to semiconductors industry in the United States, China, Europe, Japan, Korea, Southeast Asia, Taiwan, and internationally. Lam Research Corporation was incorporated in 1980 and is headquartered in Fremont, California.
ROIC (TTM)
42.8%
ROE (TTM)
65.8%
FCF Yield
2.07%
Based on trailing twelve-month data, LRCX shows a free cash flow per share of N/A and a ROIC of 42.8%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 2.07% are important context metrics when evaluating LRCX's stock valuation relative to peers.
The intrinsic value of LRCX depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether LRCX is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $248.75. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Lam Research Corporation: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Semiconductors industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting LRCX's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Lam Research Corporation, this means projecting how much free cash flow the Semiconductors will produce over the next 5-10 years, then discounting those amounts to today's dollars. LRCX's ROIC of 42.8% indicates strong capital efficiency, which supports higher growth assumptions in the DCF model.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For LRCX, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
