Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin32.0%
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin29.1%
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Financial Health
A
Years to Pay Off Debt0.8 yrs
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt$4.2B
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital$7.9B
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Valuation
N/A
Cash Flow
A
Free Cash Flow$5.4B
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
CapEx % of Net Income14.2%
Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.
Owner Earnings$6.5B
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
Metric Explanations
What each dimension measures and where the thresholds come from.
Gross Profit Margin
Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Years to Pay Off Debt
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Free Cash Flow
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
CapEx % of Net Income
Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.
Owner Earnings
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
Market Data
Key Margins
Gross Profit48.7%
Operating Margin32.0%
Net Margin29.1%
Company Info
Showing Key Metrics
Income Highlights
Metric
2025
2024
2023
2022
Gross Profit %
48.7%▲
47.3%▲
44.6%▼
45.7%
Operating Margin %
32.0%▲
28.7%▼
29.9%▼
31.2%
Net Income %
29.1%▲
25.7%▼
25.9%▼
26.7%
Diluted EPS
4.15▲
2.90▼
3.32▲
3.27
Balance Sheet Highlights
Metric
2025
2024
2023
2022
Total Assets
$21.3B
$18.7B
$18.8B
$17.2B
Total Debt
$4.5B▼
$5.0B▼
$5.0B▲
$5.0B
Working Capital
$7.9B▼
$8.5B▼
$9.0B▲
$7.7B
Years to Pay Debt
0.84
1.30
1.11
1.09
Cash Flow Highlights
Metric
2025
2024
2023
2022
Free Cash Flow
$5.4B▲
$4.3B▼
$4.7B▲
$2.6B
Owner Earnings
$6.5B
$4.6B
$5.4B
$5.5B
CapEx % of Net Income
14.2%
10.4%
11.1%
11.9%
Income Statement
2025
2024
2023
2022
Tax Effect Of Unusual Items
-2,668
-2,809
-5,760
-82
Tax Rate For Calcs
0
0
0
0
Normalized EBITDA
6,549,021
4,928,181
5,687,332
5,712,335
Total Unusual Items
-26,412
-23,024
-49,228
-723
Total Unusual Items Excluding Goodwill
-26,412
-23,024
-49,228
-723
Net Income From Continuing Operation Net Minority Interest
5,358,217
3,827,772
4,510,931
4,605,286
Reconciled Depreciation
386,277
359,699
342,432
333,739
Reconciled Cost Of Revenue
9,456,532
7,852,595
9,651,591
9,355,232
EBITDA
6,522,609
4,905,157
5,638,104
5,711,612
EBIT
6,136,332
4,545,458
5,295,672
5,377,873
Net Interest Income
53,128
66,702
-47,478
-169,550
Interest Expense
178,203
185,236
186,462
184,759
Interest Income
231,331
251,938
138,984
15,209
Normalized Income
5,381,961
3,847,987
4,554,399
4,605,927
Net Income From Continuing And Discontinued Operation
5,358,217
3,827,772
4,510,931
4,605,286
Total Expenses
12,534,623
10,623,286
12,211,506
11,845,217
Total Operating Income As Reported
5,900,968
4,263,913
5,174,860
5,381,822
Diluted Average Shares
1,290,142
1,319,950
1,358,340
1,406,280
Basic Average Shares
1,286,101
1,314,100
1,354,720
1,398,990
Diluted EPS
0
0
0
0
Basic EPS
0
0
0
0
Diluted NI Availto Com Stockholders
5,358,217
3,827,772
4,510,931
4,605,286
Net Income Common Stockholders
5,358,217
3,827,772
4,510,931
4,605,286
Net Income
5,358,217
3,827,772
4,510,931
4,605,286
Net Income Including Noncontrolling Interests
5,358,217
3,827,772
4,510,931
4,605,286
Net Income Continuous Operations
5,358,217
3,827,772
4,510,931
4,605,286
Tax Provision
599,912
532,450
598,279
587,828
Pretax Income
5,958,129
4,360,222
5,109,210
5,193,114
Other Income Expense
4,033
11,420
-60,322
-19,158
Other Non Operating Income Expenses
30,445
34,444
-11,094
-18,435
Special Income Charges
0
-18,187
-42,150
0
Restructuring And Mergern Acquisition
0
18,187
42,150
0
Gain On Sale Of Security
-26,412
-4,837
-7,078
-723
Net Non Operating Interest Income Expense
53,128
66,702
-47,478
-169,550
Interest Expense Non Operating
178,203
185,236
186,462
184,759
Interest Income Non Operating
231,331
251,938
138,984
15,209
Operating Income
5,900,968
4,282,100
5,217,010
5,381,822
Operating Expense
3,078,091
2,770,691
2,559,915
2,489,985
Research And Development
2,096,387
1,902,444
1,727,162
1,604,248
Selling General And Administration
981,704
868,247
832,753
885,737
Gross Profit
8,979,059
7,052,791
7,776,925
7,871,807
Cost Of Revenue
9,456,532
7,852,595
9,651,591
9,355,232
Total Revenue
18,435,591
14,905,386
17,428,516
17,227,039
Operating Revenue
18,435,591
14,905,386
17,428,516
17,227,039
Balance Sheet
2025
2024
2023
2022
Treasury Shares Number
1,687,582
1,648,240
1,613,800
1,570,870
Ordinary Shares Number
1,268,740
1,303,770
1,332,970
1,369,750
Share Issued
2,956,322
2,952,010
2,946,770
2,940,620
Net Debt
1,440,458
Total Debt
4,484,505
4,983,334
5,011,541
5,005,830
Tangible Book Value
8,052,934
6,774,381
6,419,229
4,661,403
Invested Capital
14,330,983
13,506,815
13,175,537
11,240,825
Working Capital
7,948,570
8,544,782
9,043,494
7,720,476
Net Tangible Assets
8,052,934
6,774,381
6,419,229
4,661,403
Capital Lease Obligations
15,141
15,973
46,176
43,371
Common Stock Equity
9,861,619
8,539,454
8,210,172
6,278,366
Total Capitalization
13,581,313
13,005,499
13,175,116
11,240,825
Total Equity Gross Minority Interest
9,861,619
8,539,454
8,210,172
6,278,366
Stockholders Equity
9,861,619
8,539,454
8,210,172
6,278,366
Gains Losses Not Affecting Retained Earnings
-62,423
-130,428
-100,706
-109,982
Other Equity Adjustments
-62,423
-130,428
-100,706
-109,982
Treasury Stock
27,763,430
24,365,783
21,530,353
19,481,429
Retained Earnings
28,988,914
24,811,315
22,032,096
18,454,724
Additional Paid In Capital
8,697,290
8,223,046
7,809,002
7,414,916
Capital Stock
1,268
1,304
133
137
Common Stock
1,268
1,304
133
137
Total Liabilities Net Minority Interest
11,483,641
10,205,274
10,571,471
10,917,266
Total Non Current Liabilities Net Minority Interest
4,915,216
5,866,836
6,386,553
6,352,507
Other Non Current Liabilities
581,610
575,012
501,286
422,941
Derivative Product Liabilities
4,835
Tradeand Other Payables Non Current
603,412
813,304
882,084
931,117
Long Term Debt And Capital Lease Obligation
3,730,194
4,478,520
5,003,183
4,998,449
Long Term Capital Lease Obligation
10,500
12,475
38,239
35,990
Long Term Debt
3,719,694
4,466,045
4,964,944
4,962,459
Current Liabilities
6,568,425
4,338,438
4,184,918
4,564,759
Other Current Liabilities
693,806
609,495
580,605
589,738
Current Deferred Liabilities
2,565,540
1,417,781
1,695,221
1,571,898
Current Deferred Revenue
2,565,540
1,417,781
1,695,221
1,571,898
Current Debt And Capital Lease Obligation
754,311
504,814
8,358
7,381
Current Capital Lease Obligation
4,641
3,498
7,937
7,381
Current Debt
749,670
501,316
421
Other Current Borrowings
749,670
501,316
421
Pensionand Other Post Retirement Benefit Plans Current
618,370
516,717
481,354
481,070
Current Provisions
248,783
228,060
256,781
232,248
Payables And Accrued Expenses
1,687,615
1,061,571
1,162,599
1,682,424
Payables
1,687,615
1,061,571
1,162,599
1,682,424
Dividends Payable
291,981
260,905
231,267
205,615
Total Tax Payable
541,426
186,700
460,630
465,601
Accounts Payable
854,208
613,966
470,702
1,011,208
Total Assets
21,345,260
18,744,728
18,781,643
17,195,632
Total Non Current Assets
6,828,265
5,861,508
5,553,231
4,910,397
Other Non Current Assets
2,590,836
1,941,917
1,905,616
1,645,847
Goodwill And Other Intangible Assets
1,808,685
1,765,073
1,790,943
1,616,963
Other Intangible Assets
182,200
138,545
168,454
101,850
Goodwill
1,626,485
1,626,528
1,622,489
1,515,113
Net PPE
2,428,744
2,154,518
1,856,672
1,647,587
Accumulated Depreciation
-2,169,641
-1,860,664
-1,642,456
-1,440,325
Gross PPE
4,598,385
4,015,182
3,499,128
3,087,912
Other Properties
23,222
24,536
53,721
42,153
Machinery Furniture Equipment
2,494,386
2,221,048
2,059,819
1,836,645
Buildings And Improvements
1,914,570
1,605,802
1,286,849
1,124,381
Land And Improvements
166,207
163,796
98,739
84,733
Current Assets
14,516,995
12,883,220
13,228,412
12,285,235
Other Current Assets
440,274
298,190
251,790
347,391
Prepaid Assets
347,391
Inventory
4,307,991
4,217,924
4,816,190
3,966,294
Finished Goods
1,362,858
1,012,707
1,293,591
1,093,456
Work In Process
282,885
284,078
325,611
471,348
Raw Materials
2,662,248
2,921,139
3,196,988
2,401,490
Receivables
3,378,071
2,519,250
2,823,376
4,313,818
Accounts Receivable
3,378,071
2,519,250
2,823,376
4,313,818
Allowance For Doubtful Accounts Receivable
-6,496
-5,277
-5,344
-5,606
Gross Accounts Receivable
3,384,567
2,524,527
2,828,720
4,319,424
Cash Cash Equivalents And Short Term Investments
6,390,659
5,847,856
5,337,056
3,657,732
Other Short Term Investments
37,641
135,731
Cash And Cash Equivalents
6,390,659
5,847,856
5,337,056
3,522,001
Cash Equivalents
4,728,423
4,279,541
3,204,534
2,506,254
Cash Financial
1,662,236
1,568,315
2,132,522
1,015,747
Cash Flow
2025
2024
2023
2022
Free Cash Flow
5,414,078
4,255,599
4,677,370
2,553,640
Repurchase Of Capital Stock
-3,422,321
-2,842,807
-2,017,012
-3,865,663
Repayment Of Debt
-507,488
-256,104
-23,206
-11,889
Issuance Of Capital Stock
2,452
15,553
11,111
5,682
Capital Expenditure
-759,186
-396,670
-501,568
-546,034
Interest Paid Supplemental Data
172,355
173,094
174,745
175,528
Income Tax Paid Supplemental Data
972,513
991,821
809,748
807,669
End Cash Position
6,407,656
5,850,803
5,587,372
3,773,535
Beginning Cash Position
5,850,803
5,587,372
3,773,535
4,670,750
Effect Of Exchange Rate Changes
28,324
-22,374
128
-30,227
Changes In Cash
528,529
285,805
1,813,709
-866,988
Financing Cash Flow
-4,936,643
-3,995,850
-2,830,667
-4,578,937
Cash Flow From Continuing Financing Activities
-4,936,643
-3,995,850
-2,830,667
-4,578,937
Net Other Financing Charges
143
-13,543
-3,552
45
Proceeds From Stock Option Exercised
140,113
119,966
109,899
108,178
Cash Dividends Paid
-1,149,542
-1,018,915
-907,907
-815,290
Common Stock Dividend Paid
-1,149,542
-1,018,915
-907,907
-815,290
Net Common Stock Issuance
-3,419,869
-2,827,254
-2,005,901
-3,859,981
Common Stock Payments
-3,422,321
-2,842,807
-2,017,012
-3,865,663
Common Stock Issuance
2,452
15,553
11,111
5,682
Net Issuance Payments Of Debt
-507,488
-256,104
-23,206
-11,889
Net Long Term Debt Issuance
-507,488
-256,104
-23,206
-11,889
Long Term Debt Payments
-507,488
-256,104
-23,206
-11,889
Investing Cash Flow
-708,092
-370,614
-534,562
612,275
Cash Flow From Continuing Investing Activities
-708,092
-370,614
-534,562
612,275
Net Other Investing Changes
51,094
-11,710
-11,171
-7,575
Net Investment Purchase And Sale
0
37,766
98,132
1,165,884
Sale Of Investment
0
37,766
98,132
1,733,703
Purchase Of Investment
0
0
-567,819
Net Business Purchase And Sale
0
0
-119,955
0
Purchase Of Business
0
0
-119,955
0
Capital Expenditure Reported
-759,186
-396,670
-501,568
-546,034
Operating Cash Flow
6,173,264
4,652,269
5,178,938
3,099,674
Cash Flow From Continuing Operating Activities
6,173,264
4,652,269
5,178,938
3,099,674
Change In Working Capital
441,801
360,478
158,738
-1,796,226
Change In Other Working Capital
1,147,759
-277,440
163,467
604,573
Change In Payables And Accrued Expense
540,252
-178,713
-631,033
291,346
Change In Accrued Expense
328,252
-304,652
-108,833
123,462
Change In Payable
212,000
125,939
-522,200
167,884
Change In Account Payable
212,000
125,939
-522,200
167,884
Change In Prepaid Assets
-206,729
-15,535
136,016
-53,121
Change In Inventory
-180,733
528,723
-961,968
-1,351,344
Change In Receivables
-858,748
303,443
1,452,256
-1,287,680
Changes In Account Receivables
-858,748
303,443
1,452,256
-1,287,680
Other Non Cash Items
6,845
10,243
52,298
-44,751
Stock Based Compensation
343,371
293,058
286,600
259,064
Deferred Tax
-363,247
-198,981
-172,061
-257,438
Deferred Income Tax
-363,247
-198,981
-172,061
-257,438
Depreciation Amortization Depletion
386,277
359,699
342,432
333,739
Depreciation And Amortization
386,277
359,699
342,432
333,739
Net Income From Continuing Operations
5,358,217
3,827,772
4,510,931
4,605,286
3/5
Graham Score
Speculative Investor
Fails most of Graham's safety criteria. Treat with caution.
Graham's Fair Value
N/A
N/A — requires
positive EPS and positive book value per share. Check the Financials tab for earnings history.
Margin of Safety
—
Market Cap / Net Assets
N/A
Net Assets: $9.9B
Warren's Owner Earnings
$6.5B
Latest fiscal year
Graham's 7 Criteria
Defensive Investor Checklist
3/5 — Speculative Investor
✅
Adequate Size
Graham required companies large enough to withstand economic downturns. This threshold ($1.5B) is inflation-adjusted from Graham's original $100M — virtually all S&P 500 companies pass this today.
$18.4B
vs > $1.5B revenue
✅
Strong Financial Condition
Current assets must be at least twice current liabilities. Note: highly profitable companies (Apple, Domino's) often run negative or low working capital deliberately — they collect cash fast and stretch payables. A failing score here is not always a warning sign.
2.21x
vs Current Ratio > 2.0x
✅
Earnings Stability
Graham required uninterrupted positive earnings. Any loss year is a red flag for defensive investors. Growth companies and cyclicals may show occasional losses during investment cycles or downturns without being fundamentally unsound.
No loss years (4 yrs data)
vs No negative EPS years
❌
Dividend Record
Graham valued dividends as evidence of financial discipline and shareholder alignment. Many excellent modern businesses (Alphabet, Amazon, Berkshire Hathaway) pay no dividend, preferring to reinvest cash at high rates of return. Failing this criterion does not indicate a poor business — it may indicate a high-growth one.
No dividend
vs Uninterrupted dividends
❌
Earnings Growth
EPS grew from $3.27 to $4.15 over 3 years. Graham's 33% threshold was set over a 10-year period. Measured over fewer years (as here), the bar is proportionally lower. Share buybacks can also inflate EPS growth without reflecting underlying business improvement.
+26.7% EPS growth
vs > 33% EPS growth
Graham's 7 Criteria — Explained
What each criterion measures and why it matters.
✅ Adequate Size — $18.4Bvs > $1.5B revenue
Graham required companies large enough to withstand economic downturns. This threshold ($1.5B) is inflation-adjusted from Graham's original $100M — virtually all S&P 500 companies pass this today.
"The minimum size of an enterprise should be not less than $100 million of annual sales."
✅ Strong Financial Condition — 2.21xvs Current Ratio > 2.0x
Current assets must be at least twice current liabilities. Note: highly profitable companies (Apple, Domino's) often run negative or low working capital deliberately — they collect cash fast and stretch payables. A failing score here is not always a warning sign.
"For industrial companies, current assets should be at least twice current liabilities."
✅ Earnings Stability — No loss years (4 yrs data)vs No negative EPS years
Graham required uninterrupted positive earnings. Any loss year is a red flag for defensive investors. Growth companies and cyclicals may show occasional losses during investment cycles or downturns without being fundamentally unsound.
"The company should have shown no deficit in the past ten years."
❌ Dividend Record — No dividendvs Uninterrupted dividends
Graham valued dividends as evidence of financial discipline and shareholder alignment. Many excellent modern businesses (Alphabet, Amazon, Berkshire Hathaway) pay no dividend, preferring to reinvest cash at high rates of return. Failing this criterion does not indicate a poor business — it may indicate a high-growth one.
"Some current dividend payments — for at least the past 20 years."
EPS grew from $3.27 to $4.15 over 3 years. Graham's 33% threshold was set over a 10-year period. Measured over fewer years (as here), the bar is proportionally lower. Share buybacks can also inflate EPS growth without reflecting underlying business improvement.
"A minimum increase of at least one-third in per-share earnings over ten years."
These metrics estimate what LRCX is worth based on fundamentals — independent of what the market prices it at.
Graham's Fair Value and NCAV are conservative floors.
EPV assumes zero growth. These are reference points, not price targets.
Net Current Asset Value
N/A
"Buy at two-thirds of net current assets." — Graham
Earnings Power Value
N/A
Per share, no-growth floor. Compare to current price.
ROIC — Return on Invested Capital
31.5%
Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.
Cash Flow Analysis
Metric
2025
2024
2023
2022
Capital Expenditure % of Net Income
14.2%
10.4%
11.1%
11.9%
Repurchase of Capital Stock
-$3.4B
-$2.8B
-$2.0B
-$3.9B
Free Cash Flow
$5.4B▲
$4.3B▼
$4.7B▲
$2.6B•
Warren's Owner Earnings
$6.5B
$4.6B
$5.4B
$5.5B
Peers & Industry
No auto-detected peers for this industry. You can manually compare LRCX against any stock using the Compare tool.
"The management of a business is its most important single factor — more important than market position, patents, or financial structure."
— Benjamin Graham
No management data available.
Risk Analysis
LRCX (LRCX) fundamental analysis — Overall grade A based on profitability, financial health, valuation and cash flow. Graham's
Fair Value: N/A. Gross profit margin: 48.7%. Operating margin: 32.0%. Net margin: 29.1%. Analysis powered by 360investing — free fundamental stock analysis based on Benjamin Graham and Warren Buffett
principles.
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and may be delayed, inaccurate, or incomplete. Past performance is not indicative of future results. Analysis, scores, and valuations are algorithmic and do not represent professional investment recommendations. Always conduct your own due
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