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 Margin35.0%
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 Margin31.2%
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 Debt2.0 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$4.3B
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$8.1B
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
F
Margin of Safety0.0%
How far below the Graham Number the stock trades. Graham required a 33% discount as a buffer against analytical error. However, the Graham Number itself assumes 1960s-era P/E and P/B norms — for modern asset-light businesses it often understates true intrinsic value, making 0% MoS appear misleadingly bad.
Price-to-Book45.96x
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Cash Flow
A
Free Cash Flow$810M
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 Income18.2%
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$2.3B
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.
About Lam Research Corporation
Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits in the United States, China, Korea, Taiwan, Japan, Southeast Asia, and Europe. The company offers ALTUS systems to deposit conformal or selective films for tungsten or molybdenum metallization applications; SABRE electrochemical deposition products for copper interconnect transition that offers copper damascene manufacturing; SPEED gapfill high-density plasma chemical vapor deposition (CVD) products; Striker single-wafer atomic layer deposition products for dielectric film solutions; and VECTOR plasma-enhanced CVD products. It also provides Flex for dielectric etch applications; Vantex, a dielectric etch system that provides RF technology and repeatable wafer-to-wafer performance enabled by Equipment Intelligence solutions; Kiyo for conductor etch applications; Syndion for through-silicon via etch applications; and Versys metal products for metal etch processes. In addition, the company offers Coronus bevel clean products to enhance die yield; and Da Vinci, DV-Prime, EOS, and SP series products to address various wafer cleaning applications. Further, it provides Reliant deposition, etch, and clean products; and Sense.i platform products, as well as customer service, spares, and upgrades. Lam Research Corporation was incorporated in 1980 and is headquartered in Fremont, California.
Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits in the United States, China, Korea, Taiwan, Japan, Southeast Asia, and Europe. The company offers ALTUS systems to deposit conformal or selective films for tungsten or molybdenum metallization applications; SABRE electrochemical deposition products for copper interconnect transition that offers copper damascene manufacturing; SPEED gapfill high-density plasma chemical vapor deposition (CVD) products; Striker single-wafer atomic layer deposition products for dielectric film solutions; and VECTOR plasma-enhanced CVD products. It also provides Flex for dielectric etch applications; Vantex, a dielectric etch system that provides RF technology and repeatable wafer-to-wafer performance enabled by Equipment Intelligence solutions; Kiyo for conductor etch applications; Syndion for through-silicon via etch applications; and Versys metal products for metal etch processes. In addition, the company offers Coronus bevel clean products to enhance die yield; and Da Vinci, DV-Prime, EOS, and SP series products to address various wafer cleaning applications. Further, it provides Reliant deposition, etch, and clean products; and Sense.i platform products, as well as customer service, spares, and upgrades. Lam Research Corporation was incorporated in 1980 and is headquartered in Fremont, California.
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.
Margin of Safety
How far below the Graham Number the stock trades. Graham required a 33% discount as a buffer against analytical error. However, the Graham Number itself assumes 1960s-era P/E and P/B norms — for modern asset-light businesses it often understates true intrinsic value, making 0% MoS appear misleadingly bad.
Price-to-Book
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
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.
Mr. Market is currently offering Lam Research Corporation at $389.04.
The business passes only 3 of 7 of Graham's defensive criteria — well below his required standard.
At $389.04, the stock trades at a 2241% premium to its Graham Number of $16.62. Graham would consider this price speculative.
There is no margin of safety at the current price. Graham would advise patience and waiting for a better entry point.
Trading at 157.5x NCAV. Expected for most quality businesses — NCAV was designed to find depression-era bargains and rarely applies to modern profitable companies..
Conclusion: By Graham's standards, this stock is speculative at its current price. The intelligent investor would look elsewhere or wait.
Showing Key Metrics
Income Highlights
Metric
Q1 2026
Q4 2025
Q4 2024
Gross Profit %
49.8%▲
49.6%•
N/A
Operating Margin %
35.0%▲
33.9%•
N/A
Net Income %
31.2%▲
29.8%•
N/A
Diluted EPS
1.45▲
1.26•
N/A
Balance Sheet Highlights
Metric
Q1 2026
Q4 2025
Q3 2024
Total Assets
$20.8B
$21.4B
N/A
Total Debt
$3.7B▼
$4.5B•
N/A
Working Capital
$8.1B▲
$7.8B•
N/A
Years to Pay Debt
2.05
2.81
N/A
Cash Flow Highlights
Metric
Q1 2026
Q4 2025
Q4 2024
Free Cash Flow
$810M▼
$1.2B•
N/A
Owner Earnings
$2.3B
$2.0B
N/A
CapEx % of Net Income
18.2%
16.4%
N/A
Income Statement
2026
2025
2024
Tax Effect Of Unusual Items
-98
-1,060
Tax Rate For Calcs
0
0
Normalized EBITDA
2,168,261
1,989,448
Total Unusual Items
-1,050
-8,034
Total Unusual Items Excluding Goodwill
-1,050
-8,034
Net Income From Continuing Operation Net Minority Interest
1,825,460
1,593,994
Reconciled Depreciation
116,322
103,925
Reconciled Cost Of Revenue
2,930,961
2,693,629
EBITDA
2,167,211
1,981,414
EBIT
2,050,889
1,877,489
Net Interest Income
3,306
12,279
Interest Expense
39,333
40,876
Interest Income
42,639
53,155
Normalized Income
1,826,412
1,600,968
Net Income From Continuing And Discontinued Operation
1,825,460
1,593,994
Total Expenses
3,794,472
3,534,588
Total Operating Income As Reported
2,047,016
1,810,203
Diluted Average Shares
1,257,325
1,261,739
Basic Average Shares
1,249,728
1,254,856
Diluted EPS
0
0
Basic EPS
0
0
Diluted NI Availto Com Stockholders
1,825,460
1,593,994
Net Income Common Stockholders
1,825,460
1,593,994
Net Income
1,825,460
1,593,994
Net Income Including Noncontrolling Interests
1,825,460
1,593,994
Net Income Continuous Operations
1,825,460
1,593,994
Tax Provision
186,096
242,619
Pretax Income
2,011,556
1,836,613
Other Income Expense
-38,766
14,131
Other Non Operating Income Expenses
-37,716
22,165
Gain On Sale Of Security
-1,050
-8,034
Net Non Operating Interest Income Expense
3,306
12,279
Interest Expense Non Operating
39,333
40,876
Interest Income Non Operating
42,639
53,155
Operating Income
2,047,016
1,810,203
Operating Expense
863,511
840,959
Research And Development
583,200
573,305
Selling General And Administration
280,311
267,654
Gross Profit
2,910,527
2,651,162
Cost Of Revenue
2,930,961
2,693,629
Total Revenue
5,841,488
5,344,791
Operating Revenue
5,841,488
5,344,791
Balance Sheet
2026
2025
2024
Treasury Shares Number
1,710,665
1,705,662
Ordinary Shares Number
1,250,539
1,251,180
Share Issued
2,961,204
2,956,842
Total Debt
3,734,479
4,483,748
Tangible Book Value
8,702,762
8,281,389
Invested Capital
14,319,258
14,629,174
Working Capital
8,054,519
7,804,870
Net Tangible Assets
8,702,762
8,281,389
Capital Lease Obligations
Common Stock Equity
10,584,779
10,145,426
Total Capitalization
14,315,163
13,875,168
Total Equity Gross Minority Interest
10,584,779
10,145,426
Stockholders Equity
10,584,779
10,145,426
Gains Losses Not Affecting Retained Earnings
-121,392
-98,701
Other Equity Adjustments
-121,392
-98,701
Treasury Stock
31,347,671
30,203,796
Retained Earnings
32,998,374
31,498,233
Additional Paid In Capital
9,054,217
8,948,439
Capital Stock
1,251
1,251
Common Stock
1,251
1,251
Total Liabilities Net Minority Interest
10,207,131
11,245,745
Total Non Current Liabilities Net Minority Interest
4,964,733
5,032,592
Other Non Current Liabilities
612,777
635,211
Tradeand Other Payables Non Current
621,572
667,639
Long Term Debt And Capital Lease Obligation
3,730,384
3,729,742
Long Term Capital Lease Obligation
Long Term Debt
3,730,384
3,729,742
Current Liabilities
5,242,398
6,213,153
Other Current Liabilities
719,708
690,606
Current Deferred Liabilities
2,091,277
2,164,722
Current Deferred Revenue
2,091,277
2,164,722
Current Debt And Capital Lease Obligation
4,095
754,006
Current Capital Lease Obligation
Current Debt
4,095
754,006
Other Current Borrowings
Pensionand Other Post Retirement Benefit Plans Current
600,267
797,939
Current Provisions
241,531
234,487
Payables And Accrued Expenses
1,585,520
1,571,393
Payables
1,585,520
1,571,393
Dividends Payable
325,318
325,828
Total Tax Payable
188,597
218,628
Accounts Payable
1,071,605
1,026,937
Total Assets
20,791,910
21,391,171
Total Non Current Assets
7,494,993
7,373,148
Other Non Current Assets
2,759,362
2,798,122
Goodwill And Other Intangible Assets
1,882,017
1,864,037
Other Intangible Assets
158,344
Goodwill
1,600,000
Net PPE
2,853,614
2,710,989
Accumulated Depreciation
-2,395,736
Gross PPE
5,249,350
Other Properties
20,456
Machinery Furniture Equipment
2,758,027
Buildings And Improvements
2,208,883
Land And Improvements
261,984
Current Assets
13,296,917
14,018,023
Other Current Assets
413,099
307,914
Inventory
3,999,992
4,037,682
Finished Goods
1,105,839
1,115,131
Work In Process
388,364
352,343
Raw Materials
2,505,789
2,570,208
Receivables
4,132,890
3,491,987
Accounts Receivable
4,132,890
3,491,987
Allowance For Doubtful Accounts Receivable
-8,348
-7,717
Gross Accounts Receivable
4,141,238
3,499,704
Cash Cash Equivalents And Short Term Investments
4,750,936
6,180,440
Cash And Cash Equivalents
4,750,936
6,180,440
Cash Equivalents
3,074,559
4,030,006
Cash Financial
1,676,377
2,150,434
Cash Flow
2026
2025
2024
Free Cash Flow
809,816
1,219,166
Repurchase Of Capital Stock
-1,162,837
-1,466,155
Repayment Of Debt
-751,194
-1,462
Issuance Of Capital Stock
9,167
Capital Expenditure
-331,604
-260,879
End Cash Position
4,766,821
6,195,598
Beginning Cash Position
6,195,598
6,711,875
Effect Of Exchange Rate Changes
-4,979
-13,337
Changes In Cash
-1,423,798
-502,940
Financing Cash Flow
-2,230,638
-1,725,202
Cash Flow From Continuing Financing Activities
-2,230,638
-1,725,202
Net Other Financing Charges
55
-1,117
Proceeds From Stock Option Exercised
0
Cash Dividends Paid
-325,829
-327,507
Common Stock Dividend Paid
-325,829
-327,507
Net Common Stock Issuance
-1,153,670
-1,462,301
Common Stock Payments
-1,162,837
-1,466,155
Common Stock Issuance
9,167
Net Issuance Payments Of Debt
-751,194
-1,462
Net Long Term Debt Issuance
-751,194
-1,462
Long Term Debt Payments
-751,194
-1,462
Investing Cash Flow
-334,580
-257,783
Cash Flow From Continuing Investing Activities
-334,580
-257,783
Net Other Investing Changes
-2,976
3,096
Capital Expenditure Reported
-331,604
-260,879
Operating Cash Flow
1,141,420
1,480,045
Cash Flow From Continuing Operating Activities
1,141,420
1,480,045
Change In Working Capital
-874,645
-255,495
Other Non Cash Items
-2,855
-19,961
Stock Based Compensation
96,616
88,539
Deferred Tax
-19,478
-30,957
Deferred Income Tax
-19,478
-30,957
Depreciation Amortization Depletion
116,322
103,925
Depreciation And Amortization
116,322
103,925
Net Income From Continuing Operations
1,825,460
1,593,994
📊Quarterly mode — Graham Fair Value & 7 Criteria require annual data. Switch to Annual for full analysis.
Quarter vs Same Quarter Last Year
YoY strips seasonality
Revenue Growth (YoY)
Prior year: $4.7B▲ $5.8B+23.8%
Revenue growth vs same quarter last year strips seasonality. Consistent double-digit growth is a Buffett hallmark.
Gross Margin
Prior year: 49.0%▲ 49.8%+0.8pp
Buffett: consistent gross margin above 40% signals durable pricing power and competitive moat.
Operating Margin
Prior year: 43.4%▲ 35.0%-8.3pp
Graham: operating margin reflects true business economics before financing. Trend matters as much as level.
Net Margin
Prior year: 28.2%▲ 31.2%+3.1pp
Net margin can be distorted by one-time items, tax timing, or interest costs — compare to operating margin for signal quality.
Quarterly Health Checks
3 Graham/Buffett criteria that are valid and reliable on quarterly data
✅ Adequate Size
Graham required scale for resilience. Quarterly revenue × 4 gives an annualised proxy.
$5.8B/qtr (≈$23.4B ann.)
vs > $1.5B annualised revenue
✅ Financial Condition
Current assets vs current liabilities — a real-time liquidity snapshot. Valid and reliable on quarterly data.
2.54x current ratio
vs ≥ 2.0x
✅ Free Cash Flow
Buffett's most important single metric. A positive FCF quarter means the business generated real cash for owners after maintaining its asset base.
$810M
vs Positive
Operating Cash Flow
$1.1B
Latest quarter · Buffett's cash reality check
ROIC
10.4%
Based on latest annual operating income
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.
This company's primary assets are likely intangible (brand, IP, talent, network effects) and don't appear on the balance sheet. Net Assets may significantly understate intrinsic value. ROIC and free cash flow are more reliable indicators of business quality.
⚠️Revenue grew vs prior year but operating margin contracted. Possible explanations: deliberate investment in growth (hiring, marketing, R&D), input cost inflation, or pricing pressure from competition. Buffett distinguishes between spending that builds moat vs. spending that doesn't.
Peers & Industry
No auto-detected peers for Semiconductor Equipment & Materials. 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
Capital Allocation & Alignment
Insider Ownership
0.28%
Low — management has little skin in the game
Return on Equity (ROE)
17.2%
Excellent — management generates strong returns on equity
Return on Assets (ROA)
8.8%
Strong — management uses assets efficiently
Share Buybacks (Latest Year)
$3.4B
Management is returning capital to shareholders via buybacks
Debt Trend YoY
-16.7% YoY
Debt is declining — management is deleveraging
Leadership Team
Timothy Archer
President, CEO & Director
Age 58
Pay: $4,197,038
0.230% of net income
Douglas Bettinger
Executive VP & CFO
Age 58
Pay: $1,793,514
0.098% of net income
Seshasayee Varadarajan
Executive VP & COO
Age 50
Pay: $1,571,591
0.086% of net income
Ram Ganesh
Vice President of Investor Relations
Karthik Rammohan
Senior Vice President of Global Operations & Enterprise Solutions
Top Institutional Holders
Institution
% Owned
Shares
Blackrock Inc.
10.62%
132,852,320
Vanguard Capital Management LLC
6.49%
81,155,744
State Street Corporation
4.73%
59,158,300
Vanguard Portfolio Management LLC
2.96%
37,060,963
Geode Capital Management, LLC
2.81%
35,175,926
FMR, LLC
2.68%
33,574,842
JPMORGAN CHASE & CO
2.62%
32,712,933
Invesco Ltd.
1.94%
24,255,563
Risk Analysis
Beta (Market Risk)
1.87
High volatility — moves more than the market
Short Interest
2.9% of float
Low short interest — market is not heavily bearish
Debt-to-Equity
0.35x
Conservative balance sheet — low financial risk
Current Ratio
2.54x
Strong liquidity — Graham approved
52-Week Price Range
Low: $87.75Current: $389.04High: $401.00
Currently at 96% of 52-week range
Lam Research Corporation (LRCX) fundamental analysis — Overall grade B based on profitability, financial health, valuation and cash flow. Graham's
Fair Value: $16.62. Margin of safety: 0%. Gross profit margin: 49.8%. Operating margin: 35.0%. Net margin: 31.2%. Market cap: $486.5B. Sector: Technology. Industry: Semiconductor Equipment & Materials. Analysis powered by 360investing — free fundamental stock analysis based on Benjamin Graham and Warren Buffett
principles.
Disclaimer: 360investing is provided for informational and educational purposes only and does not constitute financial, investment, legal, or tax advice. All data is sourced from public third-party providers
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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