Is Lam Research Corp (LRCX) overvalued?
On Equity Rank's model estimate, LRCX trades close to its fair value (5% above it). Lam Research Corp (LRCX) last closed at $200.44; the multi-method model fair value is $191.42.
| Price | Model fair value | Price vs model |
|---|---|---|
| $200.44 | $191.42 | 5% above |
What the answer rests on
- 3 of 12 valuation methods put LRCX's value above its price and 9 put it below, so the methods mostly agree.
- To justify today's price, LRCX's free cash flow would need to grow about 24.7% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 1.5% a year.
- Over the past year the price sat below the model fair value on 1% of trading days. The gap ranged from 3% below to 135% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind LRCX's fair value · What prices assume · Other companies