MODEL VERDICT
Lam Research Corporation (LRCX) — Relative Valuation
Peer multiples, Monte Carlo simulation & quality-adjusted fair value
Popular:
Peer multiples, Monte Carlo simulation & quality-adjusted fair value
Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| Feb 28, 2026 | NEUTRAL | 0.17 | $233.89 | CURRENT | — |
| Feb 21, 2026 | NEUTRAL | 0.17 | $244.92 | CURRENT | — |
| Feb 14, 2026 | NEUTRAL | 0.17 | $235.53 | CURRENT | — |
| Feb 11, 2026 | NEUTRAL | 0.17 | $226.61 | CURRENT | — |
| Jan 11, 2026 | NEUTRAL | 0.20 | $218.36 | Below threshold | +5.0% |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Forward P/E 64 analyst estimates | $173.87 | -25.7% | 20% | A- | Analyst Est. |
| EV/EBITDA 54 industry peers | $161.14 | -31.1% | 20% | A- | Peer Data |
| Industry Median P/E 47 industry peers | $174.95 | -25.2% | 15% | A | Peer Data |
| Price / Free Cash Flow 49 industry peers | $206.01 | -11.9% | 15% | B+ | Peer Data |
| EV/EBIT 51 industry peers | $197.16 | -15.7% | 8% | B+ | Peer Data |
| EV/FCF 54 industry peers | $203.94 | -12.8% | 7% | B | Model Driven |
| Peg Ratio 25 industry peers | $151.10 | -35.4% | 5% | B | Data |
| EV To Revenue 74 industry peers | $122.12 | -47.8% | 4% | B | Data |
| Price / Sales 74 industry peers | $124.25 | -46.9% | 3% | B | Model Driven |
| Earnings Yield 48 industry peers | $178.41 | -23.7% | 2% | B | Data |
| FCF Yield 53 industry peers | $213.37 | -8.8% | 1% | B | Data |
| Weighted Output Blended model output | $149.07 | -36.3% | 100% | 77 | SIGNIFICANTLY OVERVALUED |
| EPS Growth ↓ | P/E Multiple → | 46× | 51× | 56× (Current) | 61× | 66× |
|---|---|---|---|---|---|
| Bear Case (9%) | $208 | $231 | $253 | $276 | $298 |
| Conservative (15%) | $219 | $242 | $266 | $290 | $314 |
| Base Case (22.4%) | $234 | $259 | $284 | $310 | $335 |
| Bull Case (30%) | $249 | $276 | $303 | $330 | $357 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 25.99 | 24.91 | 12.85 | 41.25 | 8.78 |
| EV/EBIT | 22.33 | 20.78 | 11.27 | 36.79 | 7.82 |
| EV/EBITDA | 21.21 | 20.43 | 10.60 | 34.87 | 7.41 |
| P/FCF | 27.75 | 23.15 | 16.28 | 40.79 | 8.90 |
| P/FFO | 23.79 | 22.77 | 11.97 | 38.44 | 8.20 |
| P/TBV | 18.56 | 16.57 | 12.68 | 27.42 | 5.41 |
| P/AFFO | 26.58 | 25.15 | 13.45 | 44.30 | 9.45 |
| P/B Ratio | 13.82 | 12.96 | 9.41 | 22.39 | 4.63 |
| Div Yield | 0.01 | 0.01 | 0.01 | 0.01 | 0.00 |
| P/S Ratio | 6.70 | 6.40 | 3.43 | 11.98 | 2.67 |
Based on our peer multiples analysis with 28 valuation metrics, the model estimates LRCX's fair value at $149.07 vs the current price of $233.89, implying -36.3% downside potential. Model verdict: Significantly Overvalued. Confidence: 77/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $149.07 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $135.08 (P10) to $184.12 (P90), with a median of $159.25.
LRCX's current P/E of 56.4x compares to the industry median of 42.2x (47 peers in the group). This represents a +33.7% premium to the industry. The historical average P/E is 26.0x over 7 years. Signal: High Premium.
50 analysts cover LRCX with a consensus rating of Buy. The consensus price target is $267.50 (range: $127.00 — $325.00), implying +14.4% upside from the current price. Grade breakdown: Strong Buy (0), Buy (38), Hold (11), Sell (1), Strong Sell (0).
The model confidence score is 77/100, based on: data completeness (30), peer quality (25), historical depth (20), earnings stability (8), and model agreement (2). Cyclicality penalty: --8 points. The model shows strong agreement across inputs.
The model flags several key risks: (1) Margin reversion: Current net margin of 30.2% is 3.8 percentage points above the 7-year average (30.0%), with a Z-score of +1.8σ. If margins normalize, fair value could drop to ~$107. (2) Multiple compression: LRCX trades at the 6380th percentile of its historical P/E range. A reversion to median (26.0×) would imply significant downside. (3) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that LRCX's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of +1.8σ, meaning margins are 1.8 standard deviations above their historical average. If margins revert to the 7-year mean (30.0%), the model estimates fair value drops by 5430.0% to approximately $107. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.