Lam Research Corporation (LRCX) Fair Value & PE Analysis
Semiconductors · NASDAQ
Current Price
$253.82
PE Ratio (TTM)
37.6x
Intrinsic Value
$358.36
+29.2% margin of safety
What Is Lam Research Corporation's Fair Value?
As of 2026-10-28, applying a 35.6x earnings multiple to Lam Research Corporation's (LRCX) earnings per share of $7.12 yields a fair value estimate of $358.36 per share, versus a market price of $253.82.
Fair value from earnings multiples is sensitive to the multiple you choose. Across the sensitivity grid the estimate spans $305.08 to $418.31. This is a relative estimate anchored to earnings, not a statement of fact. For a cash flow based view, see the intrinsic value estimate on the DCF page.
How the PE model works · Recalculate in PE mode · LRCX intrinsic value (DCF view)
Is Lam Research Corporation (LRCX) Overvalued?
At $253.82, LRCX trades about 29.2% below its PE-based fair value estimate, a modest discount to its earnings power, though not enough to call it cheap outright.
COMPETITIVE MOAT
↑Proprietary Technology & Innovation
Lam Research develops highly specialized and complex wafer fabrication equipment. Continuous R&D investment creates a technological lead that is difficult for competitors to replicate quickly.
↑High Switching Costs for Customers
Customers invest heavily in Lam's equipment and integrate it into their complex manufacturing processes. The cost and disruption of switching to a competitor's equipment are substantial.
↑Deep Customer Relationships & Service
Lam maintains close ties with leading chip manufacturers, providing essential service and support. This deep integration fosters loyalty and provides valuable insights for future product development.
INVESTMENT RISKS
↓Geopolitical Tensions & Trade Restrictions
Global trade disputes and restrictions on technology exports can disrupt supply chains and limit access to key markets, impacting Lam's sales and operations.
↓Technological Obsolescence
Rapid advancements in semiconductor technology could render existing equipment obsolete. Failure to innovate quickly enough could lead to a loss of market share.
↓Customer Concentration
A significant portion of Lam's revenue may come from a few large semiconductor manufacturers. A downturn or strategic shift by one of these key customers could materially impact Lam.
Base case
LRCX base case PE valuation
Intrinsic Value
$358.36
Margin of safety
+29.2%
Expected annual return
+7.1%
Base case assumptions: 15.0% annual earnings growth, 35.65x target PE, 10% discount rate, 5 year projection. Data as of 2026-10-28.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the LRCX PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Lam Research Corporation respond.
Open PE Calculator for LRCXCompany Overview
Lam Research Corporation is a prominent supplier of equipment vital for semiconductor processing, encompassing its design, production, sales, repair, and ongoing maintenance. These sophisticated systems are fundamental for the creation of integrated circuits. The company's extensive product catalog features a variety of deposition technologies. For tungsten metallization, they provide ALTUS systems that deposit conformal films. SABRE products excel in electrochemical deposition, crucial for copper interconnect transitions and enabling copper damascene manufacturing. SOLA utilizes ultraviolet thermal processing for film treatments, while VECTOR delivers plasma-enhanced chemical vapor deposition (CVD) and atomic layer deposition (ALD) solutions. Furthermore, SPEED addresses gapfill applications with its high-density plasma CVD products, and Striker is engineered for single-wafer atomic layer deposition of dielectric films. Beyond deposition, Lam Research offers a comprehensive suite of etching tools. Flex is designed for dielectric etch applications, Kiyo handles conductor etch processes, Syndion specializes in through-silicon via etching, and Versys metal products are used for metal etch processes. The company's offerings also extend to specialized solutions like Coronus, which enhances die yield through bevel cleaning. For various wafer cleaning requirements, Lam Research supplies multiple product lines, including Da Vinci, DV-Prime, EOS, and SP series. Additionally, Metryx mass metrology systems provide precise, in-line mass measurement capabilities for semiconductor wafer manufacturing. Lam Research serves the global semiconductor industry, distributing its technologies and services across the United States, China, Europe, Japan, Korea, Southeast Asia, Taiwan, and other international markets. Established in 1980, the company maintains its corporate headquarters in Fremont, California.
Financial Metrics — LRCX PE Stock Valuation Data
PE Ratio (TTM)
37.6x
PEG Ratio
0.78
Earnings Yield
2.80%
ROE (TTM)
71.7%
Revenue/Share (TTM)
$20.89
Dividend Yield
0.44%
Debt/Equity
0.27x
Frequently Asked Questions
What is the PE ratio of LRCX?
The trailing twelve-month PE ratio of LRCX reflects how much investors pay per dollar of Lam Research Corporation's earnings. This metric is most useful when compared to Semiconductors peers and the company's own historical range.
Is LRCX overvalued based on PE ratio?
LRCX's PE of 37.6x combined with a PEG ratio of 0.78 provides a growth-adjusted perspective. A PEG below 1.0 means the P/E is low relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Semiconductors, a DCF analysis may be more appropriate.
How do I value LRCX stock using PE ratio?
To value Lam Research Corporation using PE: (1) Compare the current PE (37.6x) against the Semiconductors median to assess relative pricing, (2) check the PEG ratio (0.78) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of LRCX?
LRCX's PEG ratio is 0.78, calculated by dividing the PE ratio (37.6x) by the expected earnings growth rate. A PEG below 1.0 means the P/E is low relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for LRCX stock valuation?
PE ratio gives a quick relative read — how LRCX is priced versus Semiconductors peers. DCF provides an absolute value based on projected free cash flows. For LRCX, with a strong ROE of 71.7%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See LRCX DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Technology valuationsP/E and DCF value LRCX with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-10-28. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.