Lam Research Corp. (NASDAQ:LRCX)

Net Fixed Asset Turnover

The net fixed asset turnover ratio initially exhibits an increasing trend, rising from 9.12 in mid-2019 to a peak of 11.22 in mid-2021. This suggests improved efficiency in utilizing fixed assets to generate sales during this period. However, from mid-2021 onward, the ratio declines steadily, reaching 6.92 by mid-2024. This decrease indicates a reduction in asset utilization efficiency over the last three years of the period analyzed.

Net Fixed Asset Turnover Including Operating Lease, Right-of-Use Asset

This adjusted ratio follows a similar pattern to the basic net fixed asset turnover ratio but generally reports lower values. It starts at 9.12 in mid-2019, decreases to a low of 8.06 in mid-2020, then climbs to 9.9 in mid-2021, before gradually declining again to 6.05 by mid-2024. The pattern reflects the impact of incorporating operating lease assets, which moderates the turnover ratios but maintains the overall trend of initial improvement followed by a decline.

Total Asset Turnover

The total asset turnover ratio shows some fluctuations across the periods. It dips from 0.8 in mid-2019 to 0.69 in mid-2020, then improves to a high of 1.0 in mid-2022. After this peak, it decreases to 0.93 in mid-2023 and further down to 0.8 by mid-2024. This trajectory suggests an initial reduction in efficiency in using the total assets, improvement for a couple of years, followed by a decline back to the original level over the entire period.

Equity Turnover

The equity turnover ratio demonstrates considerable variability. It decreases from 2.07 in mid-2019 to 1.94 in mid-2020, then surges to 2.74 by mid-2022, indicating enhanced utilization of shareholders' equity to generate revenue. Subsequently, it declines to 2.12 in mid-2023 and further to 1.75 by mid-2024. This suggests a reduction in equity efficiency in the later years, potentially due to shifts in either revenue generation or equity base.

Revenue Trends

The revenue exhibited a generally upward trajectory from 2019 to 2023, starting at approximately $9.65 billion in 2019 and peaking at about $17.43 billion in 2023. This represents a compounded growth over the four-year span. However, in 2024, there was a noticeable decline to roughly $14.91 billion, indicating a reversal in the prior growth trend.

Property and Equipment, Net

The net value of property and equipment demonstrated consistent growth throughout the entire period. Beginning at approximately $1.06 billion in 2019, it increased steadily each year to reach about $2.15 billion by 2024. This indicates continued investment and expansion in fixed assets over the six-year timeframe.

Net Fixed Asset Turnover

The net fixed asset turnover ratio fluctuated during the period. From 2019 to 2021, the ratio increased from 9.12 to a peak of 11.22, suggesting improved efficiency in utilizing fixed assets to generate revenue. After 2021, the ratio declined steadily to 6.92 by 2024, indicating a reduction in asset efficiency despite the continuous growth in fixed assets. The decline coincides with the revenue decrease observed in 2024, contributing to the lowered turnover ratio.

Summary

The data reveal a phase of revenue growth accompanied by increasing asset investment until 2023, followed by a decline in revenue in 2024 while asset levels continued to rise. The net fixed asset turnover ratio reflects this dynamic by initially improving and then deteriorating, pointing towards less effective use of assets in the most recent year. This combination suggests potential challenges in maintaining revenue growth relative to the expanding asset base.

Revenue Trends

The revenue displayed a strong growth trajectory from June 30, 2019, to June 25, 2023, increasing from approximately 9.65 billion USD to about 17.43 billion USD. This represents a significant expansion over four years. However, in the latest period ending June 30, 2024, revenue declined to roughly 14.91 billion USD, indicating a decrease after several years of growth.

Property and Equipment

The net value of property and equipment, including operating lease right-of-use assets, exhibited consistent growth throughout the entire time span. It increased steadily from around 1.06 billion USD in mid-2019 to approximately 2.46 billion USD by mid-2024. This indicates ongoing investment and expansion in fixed assets.

Net Fixed Asset Turnover Ratio

The net fixed asset turnover ratio, which measures revenue generated per dollar of fixed assets, showed variability over the periods. It started at 9.12 in 2019, dipped to 8.06 in 2020, then peaked at 9.9 in 2021. After that, it gradually declined, reaching 6.05 in 2024. The downward trend in this ratio in recent years suggests a reduced efficiency in utilizing fixed assets to generate revenue, potentially linked to the revenue decline observed in the latest period despite increased asset base.

Overall Insights

The data highlights a period of robust growth in revenue and asset base until mid-2023, followed by a revenue contraction in the most recent year. The expansion in property and equipment assets continued even during the revenue downturn, which, combined with a decreasing net fixed asset turnover ratio, indicates less effective asset utilization. This could suggest capacity underutilization or shifts in operational efficiency that warrant further investigation.

The financial data reflects significant developments over the six-year period from 2019 to 2024. Revenue initially increased steadily, reaching a peak in 2023 before declining in 2024. Total assets demonstrated consistent growth throughout the entire period, indicating ongoing investments or acquisitions. The total asset turnover ratio exhibited fluctuations, with a downward trend in 2020, followed by improvement until 2022, and then a subsequent decline again in 2024.

Revenue

Revenue rose from approximately 9.65 billion US dollars in mid-2019 to a peak of 17.43 billion in mid-2023, representing strong growth during this timeframe. However, in the most recent period of 2024, revenue decreased sharply to 14.91 billion, suggesting challenges in maintaining prior growth momentum.

Total assets

Total assets expanded steadily year-over-year from around 12.0 billion in 2019 to approximately 18.78 billion in 2023 and then stabilized slightly lower at 18.75 billion in 2024. This consistent asset growth indicates ongoing capital accumulation, either through acquisitions, capital expenditures, or asset revaluation.

Total asset turnover ratio

The total asset turnover ratio, which measures revenue generated per unit of asset, started at 0.8 in 2019 before declining to 0.69 in 2020. Subsequently, it increased to a high of 1.0 in 2022, reflecting improved efficiency in utilizing assets to generate revenue. The ratio decreased again to 0.93 in 2023 and further to 0.8 in 2024, mirroring the revenue drop despite relatively stable asset levels, indicating reduced asset utilization efficiency in recent years.

Revenue Trend

The revenue increased consistently from June 30, 2019, reaching a peak on June 25, 2023. Specifically, revenue grew from approximately $9.65 billion in 2019 to about $17.43 billion in 2023, showing a strong upward trajectory over four years. However, there was a decline observed in the most recent period, June 30, 2024, where revenue dropped to around $14.91 billion. This indicates a contraction in sales or business activity compared to the previous year.

Stockholders’ Equity

Stockholders' equity demonstrated a steady increase throughout the periods analyzed. Starting at approximately $4.67 billion in 2019, equity rose to around $8.53 billion by mid-2024. This shows a notable accumulation of equity capital or retained earnings, suggesting ongoing profitability or capital injections. The growth in equity also indicates strengthening financial stability and a more substantial capitalization base.

Equity Turnover Ratio

The equity turnover ratio exhibited variability over the years. It began at 2.07 in 2019, decreased slightly in 2020 to 1.94, then increased to a high of 2.74 in 2022. Following this peak, the ratio declined steadily, reaching 1.75 in 2024. This ratio reflects how efficiently the company is utilizing its equity to generate revenue. The decline in the last two years suggests a reduction in efficiency or slower revenue growth relative to the growth in equity, possibly linked to the observed revenue decrease in 2024.

Summary Insight

Overall, the financial data reveals a period of growth in both revenue and equity from 2019 to 2023, accompanied by fluctuating but generally strong equity turnover ratios. The decline in revenue and equity turnover in 2024 points to a potential slowdown or operational challenges. Despite this, the continued growth in equity suggests stable financial foundations, which may provide resilience during periods of lower revenue.