Short-term trend line helping guide Lam Research higher
Since the low at the beginning of June, semiconductor manufacturer Lam Research (Nasdaq: LRCX) has been trending higher and a trend line connects the stock's lows over the last two months. The stock hit the trend line earlier this week and has bounced since then.
We see that the trend line connects the lows from June 17, June 25, and July 8. The series of higher lows has helped the stock move up 16% since the beginning of June and that is considerably better than the 6.76% gain by the S&P 500.
We see that the daily stochastic readings reached an oversold level earlier this week and have since made a bullish crossover. We saw a similar move by the indicators back in March before the stock went on a rally that saw the stock gain 25% in less than two months.
Another potential bullish factor for the stock is the fact that the 50-day moving average is in the same vicinity of the trend line and that could provide a secondary layer of support for the stock.
From a fundamental perspective, Lam Research has performed extremely well in the last few years, but struggled in the most recent quarterly report. The company had managed to grow earnings at a rate of 45% per year over the last three years, but second quarter earnings declined by 32% on a year over year basis.
The revenue numbers tell a similar story with the annual growth rate for the last three years coming in at 25%, but in the second quarter revenues were down 24% from the second quarter of 2018.
Lam Research has some really strong management efficiency ratings with a return on equity of 41.6% and a profit margin of 30.4%.
The Tickeron SMR rating for this company is 37, indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of 20 indicates that the company is slightly undervalued in the industry. A rating of 1 point to the most undervalued stocks, while a rating of 100 points to the most overvalued stocks. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization.
Turning our attention to the sentiment indicators for Lam Research we see that there are 22 analysts following the stock. Of those 22 analysts, only 12 rate the stock as a “buy” while the other 10 rate the stock as a “hold”. This gives an overall buy percentage of 54.5% and that is well below average.
The short interest ratio is currently at 4.99 and that is slightly higher than the average stock and is indicative of slightly bearish sentiment. There are 8.2 million shares sold short at this time and that is up from 6.2 million in mid-May. At the same time that the number of shares sold short was on the rise, the average daily trading volume was falling from 1.75 million to 1.65 million.
With Lam Research having pretty solid fundamental ratings and seeing the upward trend in the stock, it is somewhat surprising to see the bearish sentiment toward the stock. From a contrarian perspective this could be good for the stock as it can help push the stock higher in the coming weeks.
LRCX sees its 50-day moving average cross bullishly above its 200-day moving average
The 50-day moving average for LRCX moved above the 200-day moving average on June 16, 2025. This could be a long-term bullish signal for the stock as the stock shifts to an upward trend.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on June 04, 2025. You may want to consider a long position or call options on LRCX as a result. In of 85 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for LRCX just turned positive on June 09, 2025. Looking at past instances where LRCX's MACD turned positive, the stock continued to rise in of 55 cases over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where LRCX advanced for three days, in of 300 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 261 cases where LRCX Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The RSI Indicator demonstrates that the ticker has stayed in the overbought zone for 10 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 10 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where LRCX declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
LRCX broke above its upper Bollinger Band on June 09, 2025. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 75, placing this stock better than average.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. LRCX’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (15.649) is normal, around the industry mean (9.434). P/E Ratio (37.872) is within average values for comparable stocks, (63.871). Projected Growth (PEG Ratio) (2.793) is also within normal values, averaging (2.352). Dividend Yield (0.008) settles around the average of (0.020) among similar stocks. P/S Ratio (9.174) is also within normal values, averaging (36.027).
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
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General Information
a manufacturer of semiconductor processing equipment
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