Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Lam Research Corp., FCFF calculation
US$ in thousands
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).
The financial data exhibits a cyclical growth pattern in both net cash provided by operating activities and free cash flow to the firm (FCFF) over the observed six-year period. While periodic contractions occur, the overall trajectory demonstrates a significant expansion in cash generation capacity.
- Net Cash Provided by Operating Activities
- Operating cash flows demonstrate a fluctuating trend, beginning at 3.59 billion USD in 2021 and reaching a peak of 6.17 billion USD in 2025. A contraction is observed in 2022, followed by a substantial recovery in 2023. This pattern of expansion and slight retraction persists through 2024 and 2025, concluding with a moderate decrease to 5.86 billion USD in 2026.
- Free Cash Flow to the Firm (FCFF)
- FCFF closely tracks the movements of operating cash flow, mirroring its cyclical volatility. From an initial 3.39 billion USD in 2021, FCFF declined to 2.70 billion USD in 2022 before increasing sharply to 4.81 billion USD in 2023. The highest valuation is reached in 2025 at 5.57 billion USD, with a subsequent decline to 5.02 billion USD in 2026.
- Cash Flow Correlation and Capital Expenditure Trends
- A strong positive correlation is maintained between operating cash flows and FCFF throughout the period. The narrow variance between these two metrics suggests that capital expenditures remain relatively stable and proportional to the cash generated from operations, ensuring that a high percentage of operating cash is converted into free cash flow available to the firm.
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Interest Paid, Net of Tax
Lam Research Corp., interest paid, net of tax calculation
US$ in thousands
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).
2 2026 Calculation
Cash payments for interest, tax = Cash payments for interest × EITR
= 150,101 × 12.10% = 18,162
An analysis of the financial data reveals a general downward trajectory in net cash payments for interest over the observed six-year period, accompanied by relatively stable fluctuations in the effective income tax rate.
- Net Interest Cash Outflows
- Cash payments for interest, net of tax, decreased from 182,356 thousand US$ in June 2021 to 131,939 thousand US$ by June 2026. A significant reduction occurred between 2021 and 2022, followed by a period of relative stability from 2022 through 2025, where payments hovered between 151,959 thousand US$ and 154,999 thousand US$. The most recent period ending June 2026 shows the lowest net interest payment in the series, representing a total decrease of approximately 27.6% since 2021.
- Effective Income Tax Rate (EITR) Stability
- The effective income tax rate remained within a narrow corridor, ranging from a low of 10.07% in 2025 to a peak of 12.21% in 2024. A gradual increase was observed from 2021 to 2024, followed by a temporary contraction in 2025 and a subsequent recovery to 12.10% in 2026.
- Interaction Between Tax Rates and Interest Payments
- The net cost of interest is influenced by the tax shield provided by the EITR. In 2025, a decrease in the EITR to 10.07% coincided with a slight increase in net cash payments for interest (154,999 thousand US$), suggesting that a lower tax rate reduced the tax-deductibility benefit of interest expenses. Conversely, the sharp decline in net interest payments in 2026, occurring alongside a rising EITR of 12.10%, indicates a substantial reduction in gross interest obligations or a strategic reduction in debt levels that outweighed the impact of the tax rate change.
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Enterprise Value to FCFF Ratio, Current
Lam Research Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 414,044,421) |
| Free cash flow to the firm (FCFF) | 5,019,883) |
| Valuation Ratio | |
| EV/FCFF | 82.48 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Advanced Micro Devices Inc. | 148.88 |
| Analog Devices Inc. | 42.76 |
| Applied Materials Inc. | 68.16 |
| Broadcom Inc. | 66.10 |
| Intel Corp. | — |
| KLA Corp. | 66.61 |
| Micron Technology Inc. | 474.59 |
| NVIDIA Corp. | 55.68 |
| Qualcomm Inc. | 13.51 |
| Texas Instruments Inc. | 85.64 |
| EV/FCFF, Sector | |
| Semiconductors & Semiconductor Equipment | 87.59 |
| EV/FCFF, Industry | |
| Information Technology | 58.30 |
Based on: 10-K (reporting date: 2026-06-28).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Lam Research Corp., historical EV/FCFF calculation, comparison to benchmarks
| Jun 28, 2026 | Jun 29, 2025 | Jun 30, 2024 | Jun 25, 2023 | Jun 26, 2022 | Jun 27, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Enterprise value (EV)1 | 387,754,185) | 127,187,188) | 102,685,613) | 86,575,659) | 64,909,177) | 82,774,600) | |
| Free cash flow to the firm (FCFF)2 | 5,019,883) | 5,566,193) | 4,181,039) | 4,811,491) | 2,695,430) | 3,391,926) | |
| Valuation Ratio | |||||||
| EV/FCFF3 | 77.24 | 22.85 | 24.56 | 17.99 | 24.08 | 24.40 | |
| Benchmarks | |||||||
| EV/FCFF, Competitors4 | |||||||
| Advanced Micro Devices Inc. | — | 57.07 | 72.30 | 225.41 | 38.82 | 43.41 | |
| Analog Devices Inc. | — | 28.20 | 33.82 | 25.61 | 23.12 | 39.16 | |
| Applied Materials Inc. | — | 34.62 | 17.55 | 17.40 | 19.06 | 26.22 | |
| Broadcom Inc. | — | 55.57 | 51.00 | 28.53 | 14.74 | 19.47 | |
| Intel Corp. | — | — | — | — | — | 16.94 | |
| KLA Corp. | 63.19 | 30.51 | 29.56 | 19.99 | 19.05 | 26.29 | |
| Micron Technology Inc. | — | 92.67 | 203.18 | — | 16.58 | 28.79 | |
| NVIDIA Corp. | 48.49 | 51.89 | 61.32 | 142.92 | 78.06 | 69.50 | |
| Qualcomm Inc. | — | 14.87 | 16.26 | 11.61 | 18.18 | 17.47 | |
| Texas Instruments Inc. | — | 68.04 | 89.36 | 89.85 | 27.02 | 24.20 | |
| EV/FCFF, Sector | |||||||
| Semiconductors & Semiconductor Equipment | — | 49.77 | 56.97 | 60.28 | 34.98 | 26.15 | |
| EV/FCFF, Industry | |||||||
| Information Technology | — | 43.77 | 39.11 | 34.01 | 26.44 | 27.44 | |
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).
3 2026 Calculation
EV/FCFF = EV ÷ FCFF
= 387,754,185 ÷ 5,019,883 = 77.24
4 Click competitor name to see calculations.
The valuation of the entity relative to its free cash flow to the firm (FCFF) demonstrates a period of relative stability from 2021 through 2025, followed by a significant divergence in 2026.
- Enterprise Value Trends
- Enterprise value exhibited volatility in the early period, declining from 82.77 billion USD in 2021 to 64.91 billion USD in 2022, before entering a consistent growth phase. This growth reached 127.19 billion USD by 2025, followed by an exceptional increase to 387.75 billion USD in 2026.
- Free Cash Flow to the Firm (FCFF) Performance
- Cash flow generation showed moderate fluctuations, reaching a low of 2.69 billion USD in 2022 and a peak of 5.57 billion USD in 2025. Unlike the enterprise value, the FCFF remained within a relatively narrow corridor, ending at 5.02 billion USD in 2026, indicating that operational cash generation did not scale proportionally with the total enterprise valuation.
- EV/FCFF Ratio Interpretation
- The EV/FCFF ratio remained largely range-bound between 17.99 and 24.56 from 2021 to 2025, suggesting a consistent valuation multiple relative to cash flow. The lowest multiple occurred in 2023, driven by a sharp increase in FCFF. However, a dramatic shift is observed in 2026, where the ratio surged to 77.24. This spike is attributed to the disproportionate increase in enterprise value while FCFF remained stable, signifying a severe decoupling of market valuation from current cash flow fundamentals.
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