Lam Research Corp. (NASDAQ:LRCX)

The financial ratios over the observed periods reveal several noteworthy trends in valuation metrics.

Price to Earnings (P/E) Ratio

The P/E ratio begins at 24.23 in September 2019 which shifts downwards to a low near 10.51 in December 2022, indicating a period of potentially improving earnings relative to price. Following this trough, there is a gradual increase in the P/E ratio, reaching a peak of 33.64 by March 2024, suggesting growing investor expectations or price appreciation relative to earnings. The ratio then tapers slightly towards 24.09 by June 2025.

Price to Operating Profit (P/OP) Ratio

This ratio exhibits a pattern similar to P/E, initially recorded at 20.4 in September 2019 and gradually decreasing to a low of 8.94 in December 2022. Post this period, the P/OP ratio increases sharply to 30.42 in March 2024, followed by a moderate decline to 21.88 by June 2025. The fluctuation indicates variations in operating profitability valuation and possibly changing market sentiment regarding operational performance.

Price to Sales (P/S) Ratio

The P/S ratio also declines from 5.43 in September 2019 down to a low around 2.83 in December 2022. After this low, it rebounded to a peak of 8.53 in March 2024. Subsequently, the ratio decreases moderately to 7.00 by June 2025. This trend suggests sales valuations were compressed in the earlier years, improving significantly around 2023-2024, possibly reflecting stronger sales growth or improved market perception.

Price to Book Value (P/BV) Ratio

The P/BV ratio starts at 8.13 in September 2019, experiences fluctuations with peaks (notably 16.94 in March 2021 and 15.14 in March 2024), and declines to a low of 6.88 in September 2022. Afterward, it rises again to around 13.09 by June 2025. This indicates variability in how the market values the company's net assets, with considerable movement reflecting shifts in investor confidence or changes in book value.

Across all ratios, a common pattern emerges: a decline in valuation multiples to lows around late 2022, followed by a robust rebound and peak in early 2024, and then a moderate correction or stabilization thereafter. This suggests the company experienced a period of market undervaluation or earnings pressure until late 2022, succeeded by improved financial performance or market sentiment driving valuation expansion through 2023 into early 2024, with a partial normalization in the subsequent quarters.

Share Price Trends

The share price exhibits notable volatility throughout the observed periods, beginning at $27.65 in September 2019 and demonstrating several peaks and troughs. Early on, the price rose from $26.19 in March 2020 to a peak of $63.81 by March 2021. Following this peak, a decline occurs, with the price dropping to $37.40 by September 2022. After this drop, there is a recovery trend, culminating in a high of $102 by June 2025. Overall, the share price shows significant appreciation with fluctuations corresponding to broader market or company-specific events.

Earnings Per Share (EPS) Trends

EPS data is available starting from June 2020 at $1.55. From this point, EPS shows a consistent upward trajectory, rising to $3.80 by December 2022. A slight decline follows to a low of $2.64 by September 2023, after which EPS again increases steadily, reaching $4.23 by June 2025. This suggests overall earnings growth over the period, with some variability in mid-term values.

Price-to-Earnings (P/E) Ratio Trends

The P/E ratio starts at 24.23 in June 2020, decreases to a low of 10.51 by September 2022, and then rises to a peak of approximately 33.64 by September 2023. Subsequently, it declines again to around 19.61 by March 2025 before rising to 24.09 in June 2025. The fluctuation in P/E indicates varying market valuation relative to earnings, with periods of higher investor confidence or expectations (high P/E) alternating with phases reflecting more conservative valuation (lower P/E).

Relationship Between Share Price, EPS, and P/E Ratio

The data reveals that share price trends do not always move in tandem with EPS growth. For example, despite a steady increase in EPS through late 2022, the share price decreased during that period, possibly reflecting market concerns or broader economic conditions. Conversely, the share price surged notably in the later periods alongside rising EPS and an increase in the P/E ratio, indicating improving market sentiment and possibly anticipated future growth. The variability of the P/E ratio suggests shifts in market expectations independent of immediate EPS changes.

Overall Summary

The company demonstrates a general long-term upward trend in share price and earnings per share, despite interim fluctuations. Market valuation, as indicated by the P/E ratio, experiences significant oscillations, reflecting changing investor perceptions and risk assessments. The data suggests resilience in earnings with periods of market correction and recovery impacting share price and valuation multiples.

Share Price Trend

The share price exhibits notable volatility over the examined periods. Initially, it fluctuated between approximately $27.65 and $37.46 until mid-2020, before experiencing a pronounced upward trajectory peaking near $63.81 in early 2021. Subsequently, it shows variability with a general upward tendency, reaching a peak of $102 toward the latest period. There are distinct intervals of both decline and recovery, reflecting market sensitivity and potential external influences.

Operating Profit Per Share (OPPS)

Operating profit per share started being recorded from June 2020, beginning at $1.84. It displayed a consistent upward trend, peaking at $4.48 in the first quarter of 2023. Following this peak, a gradual decline is observed, with OPPS dipping to $2.96 by the third quarter of 2023 before recovering moderately towards the end of the dataset, finishing at $4.66. This pattern suggests phases of operational efficiency interspersed with periods of reduced profitability before rebounding.

Price to Operating Profit Ratio (P/OP)

The P/OP ratio demonstrates significant fluctuation throughout the period analyzed. It begins with a value of 20.4 at the start of OPPS reporting and decreases to below 9 by the end of 2021, indicating that share prices were lower relative to the operating profit per share at that time. However, from 2022 onward, the ratio increases sharply, peaking above 30 in mid-2023, suggesting that the share price was relatively high compared to operating profits. Following this peak, the ratio declines again into the 17 to 22 range near the end, reflecting a normalization or adjustment in valuation relative to earnings.

Correlation and Insights

There is a discernible inverse correlation between the OPPS and the P/OP ratio during certain periods—when operating profits per share increased significantly, the P/OP ratio tended to decrease, indicating an improving valuation based on earnings. Conversely, spikes in the P/OP ratio correspond with lower or recovering operating profits relative to the share price appreciation, suggesting periods where market expectations may have outpaced operational performance. The volatility in share price paired with these shifts in profitability and valuation ratios indicates dynamic market conditions affecting investor sentiment and company performance assessment.

Share Price Trend

The share price exhibited significant volatility over the observed periods. Initially, from 2019 to early 2020, there was moderate fluctuation, followed by a notable increase starting from late 2020 through early 2021, peaking at 63.81 US$ in March 2021. The price then moderately declined and stabilized around the mid-40s to mid-50s range until mid-2022. From late 2022 onwards, there was a renewed upward trend, reaching an all-time high of 102 US$ by June 29, 2025, indicating strong investor confidence or positive market sentiment towards the company during this latter period.

Sales Per Share Development

Sales per share showed a steady and consistent growth trend across the periods starting from March 2020, where data became available. Beginning at 6.9 US$, sales per share gradually increased, peaking at 14.57 US$ in June 2025. Despite slight fluctuations around early 2023, the overall trajectory was positive, suggesting continual revenue growth and improving operational performance on a per-share basis.

Price-to-Sales Ratio (P/S)

The price-to-sales ratio presented fluctuating patterns throughout the timeframe. Early in the period (from mid-2020 to early 2021), P/S ratios were relatively high, peaking near 6.86, indicating that the market valuation was relatively strong compared to sales. Following this, from 2021 to 2022, there was a consistent decline, reaching lows close to 2.83, implying either a dip in market valuation relative to sales or increased sales relative to price. Subsequently, from late 2022 through June 2025, the P/S ratio experienced a rebound with a pronounced peak at 8.53, then dipping and rising again to 7 by the end of the dataset. These variations suggest changes in market perceptions, valuation adjustments, or shifts in sales growth rates affecting the balance between price and sales metrics.

Integrated Insights

The combination of share price, sales per share, and P/S ratio trends reflects dynamic market and operational conditions. While sales per share steadily improved, indicating business growth, the share price showed more volatility, possibly influenced by external factors such as market sentiment, broader economic conditions, or company-specific events. The P/S ratio's fluctuations highlight changing investor expectations and valuation benchmarks over time. Notably, the sharp increase in share price and P/S ratio from late 2023 to mid-2025, despite relatively modest increases in sales per share during the same period, may suggest market optimism, speculative activity, or anticipated future performance gains not yet reflected in sales figures.

The share price exhibited notable volatility over the observed period, demonstrating an overall upward trend with fluctuations. Initially moving from $27.65 to a peak near $63.81 by March 2021, the price then experienced declines and rises in succession. The price reached its highest point at $102 by June 2025, indicating strong growth over the long term despite interim volatility.

The book value per share (BVPS) showed steady increments throughout the quarters, starting from $3.40 and progressively rising to $7.79 by June 2025. This consistent increase reflects ongoing growth in the company's net asset value per share, suggesting strengthening financial stability and accumulation of shareholder equity.

The price-to-book value (P/BV) ratio, which measures the market's valuation relative to the book value, exhibited meaningful fluctuations. It started at 8.13 and rose sharply to 16.94 in early 2021, implying heightened market optimism and potentially increased investor expectations during that time. Subsequently, the ratio fell notably to 6.88 by September 2022, indicating a market reassessment or reduced premium over book value. Afterward, the P/BV ratio showed variable behavior, generally fluctuating between approximately 7.7 and 15.1, before stabilizing near 13.09 at the end of the period under review.

The divergence between the steady rise in BVPS and the fluctuating share price and P/BV ratios suggests that market sentiment and external factors significantly influenced the company's valuation beyond fundamental asset growth. The peak in share price and P/BV ratio in early 2021 likely corresponds to favorable market conditions or company-specific developments, while the subsequent correction and volatility reflect adjustments in investor sentiment or broader market dynamics.

Overall, the financial indicators point to a strengthening underlying asset position accompanied by variable market perception, resulting in fluctuating valuation multiples across the reported quarters.

Share Price

Experienced significant growth from $27.65 to $102 over six years, with periods of both rapid increases and notable pullbacks.

Book Value per Share (BVPS)

Consistently increased from $3.40 to $7.79, indicating steady growth in net asset value per share.

Price-to-Book Value (P/BV) Ratio

Displayed volatility, peaking at 16.94 in early 2021 and dipping to 6.88 in late 2022, before fluctuating moderately and finishing at 13.09.