Stock Analysis on Net
AI Tokens
Stock Analysis on Net

Lam Research Corp. (NASDAQ:LRCX)

Dividend Discount Model (DDM)

Microsoft Excel

In discounted cash flow (DCF) valuation techniques the value of the stock is estimated based upon present value of some measure of cash flow. Dividends are the cleanest and most straightforward measure of cash flow because these are clearly cash flows that go directly to the investor.

Intrinsic Stock Value (Valuation Summary)

Lam Research Corp., dividends per share (DPS) forecast

US$

Microsoft Excel
Year Value DPSt or Terminal value (TVt) Calculation Present value at 25.90%
0 DPS01 1.04
1 DPS1 1.53 = 1.04 × (1 + 47.07%) 1.21
2 DPS2 2.17 = 1.53 × (1 + 41.64%) 1.37
3 DPS3 2.95 = 2.17 × (1 + 36.21%) 1.48
4 DPS4 3.86 = 2.95 × (1 + 30.78%) 1.54
5 DPS5 4.84 = 3.86 × (1 + 25.35%) 1.53
5 Terminal value (TV5) 1,104.71 = 4.84 × (1 + 25.35%) ÷ (25.90% – 25.35%) 349.23
Intrinsic value of Lam Research Corp. common stock (per share) $356.35
Current share price $237.50

Based on: 10-K (reporting date: 2026-06-28).

1 DPS0 = Sum of the last year dividends per share of Lam Research Corp. common stock. See details »

Disclaimer!
Valuation is based on standard assumptions. There may exist specific factors relevant to stock value and omitted here. In such a case, the real stock value may differ significantly form the estimated. If you want to use the estimated intrinsic stock value in investment decision making process, do so at your own risk.

Required Rate of Return (r)

Microsoft Excel
Assumptions
Rate of return on LT Treasury Composite1 RF 5.64%
Expected rate of return on market portfolio2 E(RM) 17.45%
Systematic risk of Lam Research Corp. common stock βLRCX 1.72
 
Required rate of return on Lam Research Corp. common stock3 rLRCX 25.90%

1 Unweighted average of bid yields on all outstanding fixed-coupon U.S. Treasury bonds neither due or callable in less than 10 years (risk-free rate of return proxy).

2 See details »

3 rLRCX = RF + βLRCX [E(RM) – RF]
= 5.64% + 1.72 [17.45% – 5.64%]
= 25.90%

Dividend Growth Rate (g)

Dividend growth rate (g) implied by PRAT model

Lam Research Corp., PRAT model

Microsoft Excel
Average Jun 28, 2026 Jun 29, 2025 Jun 30, 2024 Jun 25, 2023 Jun 26, 2022 Jun 27, 2021
Selected Financial Data (US$ in thousands)
Cash dividends declared 1,304,056 1,180,618 1,048,553 933,559 835,474 745,294
Net income 7,265,396 5,358,217 3,827,772 4,510,931 4,605,286 3,908,458
Revenue 23,232,690 18,435,591 14,905,386 17,428,516 17,227,039 14,626,150
Total assets 23,529,743 21,345,260 18,744,728 18,781,643 17,195,632 15,892,152
Stockholders’ equity 12,470,921 9,861,619 8,539,454 8,210,172 6,278,366 6,027,188
Financial Ratios
Retention rate1 0.82 0.78 0.73 0.79 0.82 0.81
Profit margin2 31.27% 29.06% 25.68% 25.88% 26.73% 26.72%
Asset turnover3 0.99 0.86 0.80 0.93 1.00 0.92
Financial leverage4 1.89 2.16 2.20 2.29 2.74 2.64
Averages
Retention rate 0.80
Profit margin 27.56%
Asset turnover 0.92
Financial leverage 2.32
 
Dividend growth rate (g)5 47.07%

Based on: 10-K (reporting date: 2026-06-28), 10-K (reporting date: 2025-06-29), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27).

2026 Calculations

1 Retention rate = (Net income – Cash dividends declared) ÷ Net income
= (7,265,396 – 1,304,056) ÷ 7,265,396
= 0.82

2 Profit margin = 100 × Net income ÷ Revenue
= 100 × 7,265,396 ÷ 23,232,690
= 31.27%

3 Asset turnover = Revenue ÷ Total assets
= 23,232,690 ÷ 23,529,743
= 0.99

4 Financial leverage = Total assets ÷ Stockholders’ equity
= 23,529,743 ÷ 12,470,921
= 1.89

5 g = Retention rate × Profit margin × Asset turnover × Financial leverage
= 0.80 × 27.56% × 0.92 × 2.32
= 47.07%

Dividend growth rate (g) implied by Gordon growth model

g = 100 × (P0 × r – D0) ÷ (P0 + D0)
= 100 × ($237.50 × 25.90% – $1.04) ÷ ($237.50 + $1.04)
= 25.35%

where:
P0 = current price of share of Lam Research Corp. common stock
D0 = the last year dividends per share of Lam Research Corp. common stock
r = required rate of return on Lam Research Corp. common stock

Dividend growth rate (g) forecast

Lam Research Corp., H-model

Microsoft Excel
Year Value gt
1 g1 47.07%
2 g2 41.64%
3 g3 36.21%
4 g4 30.78%
5 and thereafter g5 25.35%

where:
g1 is implied by PRAT model
g5 is implied by Gordon growth model
g2, g3 and g4 are calculated using linear interpolation between g1 and g5

Calculations

g2 = g1 + (g5 – g1) × (2 – 1) ÷ (5 – 1)
= 47.07% + (25.35% – 47.07%) × (2 – 1) ÷ (5 – 1)
= 41.64%

g3 = g1 + (g5 – g1) × (3 – 1) ÷ (5 – 1)
= 47.07% + (25.35% – 47.07%) × (3 – 1) ÷ (5 – 1)
= 36.21%

g4 = g1 + (g5 – g1) × (4 – 1) ÷ (5 – 1)
= 47.07% + (25.35% – 47.07%) × (4 – 1) ÷ (5 – 1)
= 30.78%