Why Is Lam Research (LRCX) Up 9.8% Since Last Earnings Report?

It has been about a month since the last earnings report for Lam Research (LRCX). Shares have added about 9.8% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Lam Research due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.Lam Research's Q4 Earnings Beat Expectations, Revenues Rise Y/YLam Research reported fourth-quarter fiscal 2025 results, wherein both top and bottom lines surpassed the Zacks Consensus Estimate.LRCX reported fourth-quarter non-GAAP earnings of $1.33 per share, which beat the Zacks Consensus Estimate by 10.8%. The bottom line increased 64.2% on a year-over-year basis.In the fourth quarter of fiscal 2025, LRCX reported revenues of $5.17 billion, which surpassed the consensus mark by 3.6%. The top line increased 34% from the year-ago quarter’s $3.87 billion.Buoyed by better-than-expected fiscal fourth-quarter performance, Lam Research has released a strong outlook for the first quarter of fiscal 2026.LRCX’s Q4 Revenues in DetailLam Research’s Systems revenues were $3.44 billion (66.5% of total revenues), up 13% from the previous quarter and 58% year over year. Our model estimate for Systems revenues was pegged at $2.87 billion.In the Customer Support Business Group, revenues were $1.73 billion, comprising 33.5% of total revenues. This marks a 2.9% increase from the previous quarter’s $1.68 billion, and a 1.9% increase from the year-ago period. Our model estimate for Customer Support Business Group revenues was pegged at $2.02 billion.During the quarter, China contributed 35% of total revenues, Korea 22%, and Taiwan 19%. Other regions included Japan 14%, the United States 6%, Southeast Asia 2%, and Europe 2%.Operating Details of LRCXLam Research’s non-GAAP gross margin rose to 50.3%, up 130 basis points from 49% in the previous quarter.Non-GAAP operating expenses increased to $822.4 million, up 7.7% from $763.3 million. As a percentage of revenues, non-GAAP operating expenses declined to 15.9% from 16.2% in the third quarter.As a result, the non-GAAP operating margin improved 160 basis points sequentially to 34.4%.LRCX’s Balance Sheet & Cash FlowAs of June 29, 2025, Lam Research held $6.39  billion in cash and cash equivalents, up from $5.45 billion at the end of the prior quarter.Cash flow from operating activities increased significantly to $2.55 billion, up from $1.31 billion in the previous quarter. In fiscal 2025, the company generated an operating cash flow of $6.17 billion.During the quarter, Lam Research paid dividends totaling $295.2  million and repurchased shares worth $1.29 billion. During fiscal 2025, it repurchased shares worth $3.42 billion and paid $1.15 billion in dividends.LRCX Provides Strong GuidanceFor the first quarter of fiscal 2026, Lam Research projects revenues of $5.2 billion (+/- $300 million). The company expects a non-GAAP gross margin of 50% (+/-1%) and a non-GAAP operating margin of 34% (+/-1%). Non-GAAP earnings per share are projected to be $1.20 (+/- $0.10), with a diluted share count of 1.27 billion.How Have Estimates Been Moving Since Then?It turns out, fresh estimates have trended upward during the past month.The consensus estimate has shifted 21.43% due to these changes.VGM ScoresAt this time, Lam Research has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a score of C on the value side, putting it in the middle 20% for value investors.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Lam Research has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lam Research Corporation (LRCX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks