A modern memory chip is a skyscraper you could lose on a fingertip — hundreds of storeys of circuitry, stacked and wired in three dimensions. Nobody prints such a thing. It is sculpted: material laid down one atomic layer at a time, then carved away with plasma in patterns finer than a wavelength of light. The machines that do the laying and the carving — deposition and etch — come overwhelmingly from a short list of companies, and at the top of that list sits Lam Research. Its chambers run at every leading chipmaker on earth. When any of them adds a layer, Lam gets paid.
The economics compound with the physics. Each generation of chips needs more layers than the last — three-dimensional memory went from dozens of storeys to hundreds; advanced logic keeps wrapping its transistors in new geometries — so etch and deposition intensity rises with every node, cycle after cycle. Over the decade that arithmetic took Lam’s revenue from $5.9B to $23.2B and earnings per share up 27% a year, while margins climbed to 50% gross and 35% operating — extraordinary levels for machines that weigh tons and cost tens of millions of dollars apiece.
There is a second business hiding inside the first. Every chamber Lam has ever installed needs spares, service and upgrades for decades, and that installed-base franchise — $8.3B of fiscal 2026 revenue, about 36% of the total (10-K accession 0000707549-26-000037) — keeps earning through the downcycles when new-tool orders pause. It is the shock absorber that let free cash flow stay near 29% of revenue even in fiscal 2024, when revenue itself fell 14%.
Fiscal 2026 was the best year in company history, and it is worth itemizing: revenue $23.2B, up 26%; earnings per share $5.76, up 39%; gross margin above fifty percent for the first sustained stretch; $5.1B returned to shareholders; and a September-quarter guide of $8.1B that would be, by a wide margin, the largest quarter Lam has ever reported (accessions 0000707549-26-000033, 0000707549-26-000037). The artificial intelligence (AI) build-out — high-bandwidth memory above all — is pulling harder on Lam’s specific machines than any cycle before it.
The stock noticed. Twelve months ago the shares traded near $97; at the June 2026 peak they touched $433; today they sit at $314, -28% below that peak. Decompose the year and the story writes itself: price +223%, earnings +39% — the other 133 points were the multiple, expanding from the low twenties to today’s 54×. The market did not merely reward the best year in company history; it paid more than twice its own five-year-average price for each dollar of it.
That is the argument of this report in one line: at 54× reported earnings — against a 26× five-year average and a 9× downcycle low — the wonderful is fully paid for. The stock’s own history supplies the caution: this franchise saw its revenue fall twice in the past eight fiscal years, and its multiple traded below 26× for most of that period. The honest bull case is that the layer-count physics and the memory build-out have permanently raised Lam’s growth rate. The honest observation is that permanence is exactly what a 2.1-times-normal multiple requires.
What would change the arithmetic? The same two paths as ever: a price nearer the historical toll — the $151 area on current earnings, or higher as earnings grow — or a year or two of 16%-plus earnings growth at a flat price, letting the business catch up to its ticket. Neither requires anything to go wrong in the chambers. The tabs ahead grade each signal; the watch-list is a position too.
The bottom line.On the four-signal GARP framework, Lam reads as the same contradiction as its theme-mate, drawn larger: a wave that cannot crest (Light 1 — every new chip generation adds layers, and every layer is etched and deposited); a business of the first rank (Light 2 — 50% gross margins, 49% returns on capital, $8.3B of installed-base revenue cushioning the cycle); a price at 2.1 times its own five-year-average multiple with a 2.9-point negative spread to the risk-free rate (Light 3 — the most expensive-versus-history reading in this coverage); and a chart +11% above a rising 1-year average, eight weeks after a 28% air pocket (Light 4 — constructive, on probation). The framework’s conclusion is patience with a pencil: an extraordinary business whose price already assumes the extraordinary continues uninterrupted.
A balance sheet does two jobs, and a great business needs both. It has to survive trouble — a recession, a bad year, a job that goes wrong — without the wheels coming off. And it has to be strong enough to fund the plan under its own power — paying for the growth management just laid out from its own cash, not by piling on debt or selling new shares. Defense and offense.
So this tab checks the frame. A weak balance sheet can strand even a wonderful engine the moment the road turns bad; a fortress one lets the earnings keep compounding through every kind of weather — which is the whole point, because those are the earnings the market eventually weighs. The question is simple: is LRCX built to go the distance?
"Only when the tide goes out do you discover who has been swimming naked." For a company whose customers can halve their orders inside a year — and have, twice in eight years — the balance sheet is the swimsuit. This tab asks whether Lam can sail through the next downcycle with its research budget, its dividend and its franchise intact.
Read each like a price chart. The actual metric (solid line, green when rising / red when falling) is plotted with its trend line (grey dashed) on the same axis. On mean-reverting metrics like margins and returns, a tinted band also marks the level versus the metric's own ten-year median; on cumulative-dollar metrics like free cash flow that band carries no signal, so it's omitted.
Free cash flow was $4.9B in fiscal 2026 at a 27% margin. The decade’s pattern matters more than any single year: conversion has held between roughly 14% and 29% of revenue through booms and downcycles alike.
The downcycle test is the one that counts, and fiscal 2024 ran it live: revenue fell 14%, and free-cash-flow margin came in at 29% — near the decade’s high — because the $8.3B installed-base franchise keeps billing when new-tool orders pause. That is the balance sheet’s first line of defense, and it is structural.
Return on invested capital reached 47% in fiscal 2026 — against 10% a decade ago. Even the downcycle floor (28% in fiscal 2024) would flatter most industrial companies’ best years.
Capital returns: $4.9B in fiscal 2026 — $1.3B of dividends (raised to $0.26 a quarter with the October 2025 release, accession 0000707549-25-000082) plus $3.7B of buybacks under the $10.0B authorization. The dividend has grown every year of the decade, downcycles included.
Putting it together. An Altman Z-score of 34 — one of the highest readings the metric produces for a large industrial — a current ratio of 2.6, and $4.0B of long-term debt against $4.9B of annual free cash flow: under a year of cash generation covers every borrowed dollar. Deferred revenue of $2.4B (accession 0000707549-26-000033) means a meaningful slice of the coming quarters is already paid for. The balance sheet passed its most recent storm test — fiscal 2024 — with the dividend rising and research spending intact at $2.4B a year. On this tab’s question there is no debate to have. The forward cushion is unusual too: $2.4B of deferred revenue — customer cash already collected for tools and services not yet delivered — sits on the balance sheet as a paid-in-advance slice of the coming quarters (accession 0000707549-26-000033).
The thesis was set when you decided to own the company; the only question now is whether the latest quarter made it stronger or weaker. Most of what crosses the tape is noise — a penny beat, a soft week, a worrying headline. This tab strips that away and asks what actually moved: did earnings and guidance confirm the story, or crack it? Did the multiple do something the business didn’t? Read it as a standing check on your reasons for owning the company. If those reasons are intact, the day-to-day price is somebody else’s problem.
The recent year quarter by quarter (the cadence we pull), then a year-by-year look further back — each read straight from the verified figures: what the business did and what the market did. Each card carries the three lights for that period: Price and Trend computed from the period’s own data, Quality held at the report’s standing verdict (it is a judgment, not a number that flips each quarter).
GARPify rests on one idea, and it is Benjamin Graham’s: “In the short run the market is a voting machine, but in the long run it is a weighing machine.” Day to day, a share price is a vote — a show of hands driven by mood, the very sentiment you watched open a gap on the last tab. But over years the votes cancel out and the scale takes over, and what the scale weighs is earnings. Given enough time, a stock is pulled toward the profits underneath it.
That is why we spend so little time on the tape and so much on the engine. If earnings are the weight, the only questions that matter are how much this company can produce and whether the amount keeps growing — and earnings are built just three ways: more revenue × wider margins × fewer shares. That is the engine. Here is LRCX’s.
Read it like a price chart. The actual metric (solid line, green when rising / red when falling) is plotted with its moving-average trend line (grey dashed) on the same axis — the fundamental version of a price and its 200-day average. The tag (uptrend / downtrend / range-bound) reads where the actual sits relative to that trend line. On mean-reverting metrics like margins, a tinted band also marks the level versus the metric's own 10-year median; on cumulative-growth metrics like EPS and revenue that band carries no signal, so it's omitted.
Revenue reached $23.2B in fiscal 2026, up 26% — but read the whole line, because it is the most honest picture of this company’s character: down 13% in fiscal 2019, down 14% in fiscal 2024, and roughly quadrupled over the decade anyway. This is what cyclical growth looks like: the trend is powerful and the path is violent.
Earnings per share reached $5.76 in fiscal 2026 (split-adjusted), compounding 27% a year over the decade — and swinging harder than revenue in every cycle: the fiscal-2024 dip took EPS from $3.32 to $2.90 before the recovery more than doubled it in two years. Operating leverage cuts both ways; over any full cycle it has cut Lam’s way.
Operating margin reached 35% in fiscal 2026 — a record — and gross margin crossed 50%, helped by mix and by the growing weight of installed-base services. A decade ago the operating line ran at 19%. Pricing power plus scale, demonstrated across two downcycles.
The share count fell from 1.60B to 1.25B over the decade — -22% — on steady buybacks ($3.7B in fiscal 2026 alone) under a $10.0B authorization (per the fiscal-2026 annual report, accession 0000707549-26-000037). Fewer shares, same machine: a seventh of the decade’s per-share growth came from this line.
Putting it together. The four lines describe a violent compounding machine: revenue quadrupling over a decade through two drawdowns, record margins, and a shrinking share count — earnings per share up 27% a year for ten years. Then the second term of the equation: over the past year the price rose 223% while earnings rose 39% — the remaining 133 points were multiple expansion. Over five years: price +383%, earnings +114%, multiple +125%. Roughly half the five-year return — and most of the last year’s — was the market raising the price per dollar of earnings. The engine is real and running at record output; the ticket now includes a large tip. One more decomposition worth carrying: of the decade’s roughly eleven-fold earnings rise, about a fifth came from the shrinking share count and the rest from operations — a business-growth story with buybacks as amplifier. The Leadership tab’s guide-and-deliver ledger draws the same picture over a shorter window.
This is the weighing machine’s noisy twin — the voting machine, live. Day to day, price is set by mood: how much the crowd likes the story right now. That mood is the gap you watched open between earnings and price, and it swings both ways. When a stock is adored, plenty of good news is already in the price and any stumble is punished; when it is ignored, expectations are low and the surprises tend to cut the other way.
So the question here is not whether LRCX is a good business — that is what the earlier tabs and your own read are for — but how much optimism the crowd has already paid for. A wonderful business everyone already loves is a very different bet from a wonderful business the market has overlooked. This tab reads where sentiment sits today, and how much room that leaves.
"In the short run, the market is a voting machine; in the long run, it is a weighing machine." Graham’s line is this tab’s whole framework. The votes move the multiple; the scale weighs the earnings. Lam’s voting record is the most volatile in this coverage — which is precisely why it repays study.
A decade of voting: the same franchise priced anywhere from 9× to 78× per dollar of earnings. Both extremes came in the last four years, and both were repudiated within a year — the single-digit despair of the memory bust by a doubling of earnings, the 78× euphoria of June 2026 by a 28% drawdown in eight weeks.
Today’s 54× is +108% above the five-year average with the rolling-average line still being dragged upward by the spike itself. Against its theme-mate the comparison is instructive: similar franchises, similar waves — and Lam carries the larger premium to its own history, on the more cyclical earnings stream.
The decomposition quantifies the mood: of the past year’s 223% price rise, earnings explain 39 points; the remaining 133 points are re-rating. Over five years the multiple contributed +125% of its own. Re-rating is borrowed return — borrowed from future holders, at an interest rate set by the market’s patience.
What to watch is unchanged: the multiple against the earnings. The company will report record quarters — the $8.1B guide practically promises one. The stock’s return from $314 depends on whether the market keeps paying 54× for them. In fiscal 2024 it decided, abruptly, that it would not pay even 26×; in June 2026 it briefly paid 78×. Neither mood consulted the chambers.
One structural note: roughly 36% of revenue is now installed-base services (accession 0000707549-26-000037) — steadier than tool sales, and the best argument that Lam’s “normal” multiple deserves to sit above its own history. The argument has limits: services did not stop the fiscal-2024 revenue decline, and they will not stop the next one. They soften the cycle; they do not repeal it.
Everything up to here has been about the bus — the driver, the engine, the frame, the machine itself. But however good the machine, a business bought at any price is not automatically a good investment. This is where the discipline bites: you still have to buy it at a reasonable price. A great company and a great investment are not the same thing, and the difference between them is exactly what you pay.
Remember the weighing machine. Over time a price is dragged toward earnings — but the multiple you pay at the door decides how much of that growth lands in your pocket rather than the seller’s. Overpay for even the finest engine and the market can spend years merely growing back into your price. So this tab asks the plainest question in investing: at today’s price, is LRCX cheap, fair, or dear?
"Price is what you pay; value is what you get." Buffett’s most-quoted line — inherited from Benjamin Graham — is the whole of the valuation discipline in seven words. A wonderful business bought at a foolish price is a poor investment. The prior tabs establish that Lam is a wonderful business; this one asks, more pointedly than anywhere else in this coverage, what today’s price assumes.
The anchors: over five years the daily multiple on reported earnings averaged 26.24×, bottomed at 9.03× in the 2022 downcycle despair, and peaked at 77.56× at the June 2026 price top. Today’s 54.5× sits +108% above the average — 2.1 times the toll the market has typically charged for a dollar of Lam’s earnings, the widest premium-to-history in this coverage.
The fair hearing: fiscal 2026 was a record on every line, the September guide of $8.1B ± $400M implies another enormous step, deferred revenue of $2.4B is already contracted, and the layer-count physics behind high-bandwidth memory is a genuine structural change (accessions 0000707549-26-000033, 0000707549-26-000037). If the artificial-intelligence build-out has permanently lifted Lam’s growth rate, the historical average understates fair value. That word — permanently — is carrying the entire ticket price.
The arithmetic without the narrative: at 54.5× the earnings yield is 1.84% against a 4.707% ten-year Treasury, a negative 2.9-point spread. We quote no forecasts — the price itself is the forecast: at the delivered 16%-a-year pace, earnings need about 5 more years of compounding before today’s multiple sits at its historical average. The PEG on five-year growth reads 3.3 against the GARP threshold of 1. And the five-year average multiple prices current earnings near $151 — less than half of today’s quote. Every anchor pulls the same direction.
Verdict: the reddest reading on the panel, at a company whose own history argues both sides. The chart below maps Lam against the other tollbooths of the build-out on multiple versus growth — the whole neighborhood is expensive, and Lam is priced at the aggressive end of it relative to its own past. The discipline is unchanged: say plainly that the business is superb, and that at $314 the price already contains a decade in which nothing cyclical happens to a deeply cyclical company.
GARPify focuses on strong management, and we judge it by one thing: the work. A company’s future earnings come from what its leaders actually do — the plan they set, and their record of keeping it. A share price is that same work plus one thing the team does not control: the market’s mood.
So this tab reads the work first — who runs the business, what they have built, what they intend next, and whether they keep their word — and only at the very end lays it against the price. The gap between the two is where this tab is headed.
Jim Collins, in studying what separates enduring great companies from merely good ones, kept returning to a quiet variable: the quality and continuity of the people at the top. Not charisma — continuity. The companies that compounded for decades tended to be run by people who thought in decades. Lam’s leadership reads straight from that playbook.
The chief executive has run the company since late 2018; the chief financial officer’s signature has anchored the filings for years alongside him (fiscal-2026 annual report, accession 0000707549-26-000037). The one senior change in two years was handled the way good engineering companies handle succession: the chief operating officer’s retirement announced with a sitting internal successor, effective on a stated date (accession 0000707549-26-000014). No drama, no search firms, no gap.
Capital allocation runs on the same rails every year: fund the research first ($2.4B in fiscal 2026), raise the dividend (every year of the decade, now $0.26 a quarter), retire shares with what remains ($3.9B in fiscal 2026, 22% of the count over ten years). Repeatable decisions, repeated.
The governance picture is mature and technical: deep engineering leadership, orderly internal succession, and a guidance culture of explicit quarterly ranges that the company then meets or beats. This is leadership as stewardship of a franchise built on physics — execution rather than vision as the watch-word.
The September guide is the boldest promise in this coverage — a 21% sequential step to a quarter one-fifth larger than the record just set. Management guides one quarter at a time inside explicit ranges; the ledger below is why the market takes the ranges seriously.
Ask this management what the business is, and the answer is the same every quarter — which is the point. The durable message has four parts. First, layer physics: every chip generation needs more deposition and more etch, so Lam’s served market grows faster than wafer starts — the structural argument under the cyclical noise. Second, the installed base: every chamber shipped becomes an annuity, and the fleet only grows. Third, cycle honesty: management neither denies the cycle nor apologizes for it — it guides one quarter at a time and lets the ranges carry the message. Fourth, capital return: a dividend raised every year for a decade and a $10.0B authorization behind the buyback — the cash comes back, boom or bust (accessions 0000707549-25-000082, 0000707549-26-000037).
How much should you trust what they say? Quantifiably: across the five graded quarters in the Leadership ledger, delivery averaged +2.6% versus guided revenue midpoints and +9.1% versus guided earnings midpoints — zero range misses, four earnings prints above the entire range. When habitually conservative speakers make the boldest promise in company history, the base rate says treat the midpoint as a floor — and watch it like the single most informative number of the quarter, because it is. The number after that: the gross-margin print against the guided corridor, the tell on whether record volume is coming at record quality.
Lam Research builds the machines that sculpt chips: plasma-etch systems that carve features finer than a wavelength of light, and deposition systems that lay films down one atomic layer at a time. Every leading chipmaker runs its chambers. The useful way to see Lam is as a portfolio of S-curves — separate demand curves at different points in their lives: one steepening curve (foundry systems, pulled by the artificial-intelligence build-out), one violent cyclical (memory systems, today booming on high-bandwidth memory), one fading side-curve, and under all of them a recurring installed-base annuity that grows through every winter. In fiscal 2026, revenue of $23.2B split four ways:
The model has the same three gears as the rest of the theme. Sell the tool: $14.9B of systems revenue in fiscal 2026. Service the fleet: $8.3B from the installed base — the 36% annuity above. Ride the physics: every chip generation needs more layers, and every layer is etched and deposited. The result: 50% gross margins, 35% operating margins, a 49% return on invested capital, and $4.9B of free cash flow — monopoly-class economics from machines that weigh tons.
Two things to hold from this page as you read on. First, the mix explains the volatility: nearly two-thirds of revenue is new-tool sales into the most cyclical buying decision in electronics, which is why Lam’s history includes 40%-plus revenue swings that its income statement then survives in style. Second, the annuity explains the survival: an installed-base business compounding 7% a year that kept growing straight through the fiscal-2024 downcycle is what separates a great cyclical from a great business that happens to be cyclical. The Financial Strength tab shows what that annuity does to the cash flows; the Risk tab shows the two concentrations — China and memory — that ride along with the franchise; and the Valuation tab shows what the market now charges for the whole package.
Read the mix shift for what it says about the cycle: foundry went from 38% of systems revenue in fiscal 2023 to 54% in fiscal 2026 while logic’s share fell from 20% to 7% — the artificial-intelligence build-out has concentrated Lam’s tool sales onto the leading edge at remarkable speed. Memory’s share held near 39% throughout, but its composition changed underneath: high-bandwidth memory for AI accelerators is pulling the same etch-and-deposition intensity that 3-D NAND scaling did in the last cycle. Concentration cuts both ways here exactly as it does at its theme-mate — it is why the margins expanded to records, and why the Risk tab ranks the memory cycle and China among the high risks: there is no uncorrelated second business to hide in.
And read the annuity for what it says about the future: at 36% of revenue, customer support grew +7% / yr through a period that included a full downcycle — every chamber shipped in this boom becomes service revenue in the next winter, so the installed base is the one line the cycle permanently, cumulatively enlarges. What would change the slopes on the cards above: watch layer counts (they only rise), the China share (falling — from about 42% of revenue two fiscal years ago to 33.8% now, per the 10-Ks), and the ratio of service growth to systems growth, the quiet indicator of how much of each boom is being banked into the annuity.
Two mechanics worth understanding before the tabs ahead. The upgrade economics: a fab rarely rips out a Lam chamber — it converts it, buying upgrade kits and process retrofits through the service line to push an installed tool to the next node, which is why the customer-support business behaves like a subscription on the world’s fab capacity rather than a spares counter. And the forward cushion: $2.4B of deferred revenue — customer cash already collected for undelivered tools and services — sat on the balance sheet at year-end (accession 0000707549-26-000033), covering roughly 30% of the September quarter’s guided midpoint before a single new order. Competition at the leading edge is real but short-listed — a handful of names, each defending decades of installed process libraries — and the 50% gross margin is the market’s running verdict on how that contest stands.
An engineering company run by insiders with long tenures — and one recent, orderly transition at the operating level: the chief operating officer’s retirement and an internal promotion to succeed him, disclosed in February 2026 (accession 0000707549-26-000014). The top two signatures on the filings have not changed.
A note on how this report judges a team it deliberately profiles thinly: GARPify cites only what filings confirm — titles, signatures, disclosed actions — and skips the interview-circuit color. By that standard the evidence here is unusually strong: stable signatures across years of filings, one succession handled with an internal promotion and a stated date, a dividend raised every year for a decade including through a 14% revenue decline, and a guidance ledger whose misses number zero. Management quality is an output you read in the ledger, not a personality you assess in a profile.
A decade ago Lam was one strong equipment maker among several. Under this team it became one of the two names modern chipmaking cannot be built without — and it did so through the most violent demand swings of any company in this coverage. The résumé, fiscal 2016 to fiscal 2026 (per-share figures split-adjusted):
| Revenue | $5.9B→$23.2B |
| Op. margin | 19%→35% |
| Return on money invested | 10%→47% |
| Share count | 1.60B→1.25B (split-adjusted) |
| Diluted EPS | $0.52→$5.76 |
Those numbers are the result. What produced them was four levers, pulled consistently:
It matters which lever did the lifting: the first two — position and annuity — because they are the ones a downturn cannot repossess. The fiscal year just closed is the exhibit: $23.2B of record revenue, margins at all-time highs, and every quarter of it guided in advance with four of five delivered above the entire promised range.
The decade’s cash ledger makes the fourth lever concrete: fiscal 2017 through 2026, Lam generated $34.1B of free cash flow and returned $33.9B — $7.8B in dividends plus $26.2B in buybacks, roughly 100% of everything the business threw off (YCharts annual series). Across a full cycle, the revealed capital policy is: fund the research first, then hand back essentially all the rest. The stress exhibit is fiscal 2024: revenue down 14%, and the dividend rose anyway — the year to reread when the next downcycle headline arrives.
A structural note completes the résumé: over just the last three fiscal years the installed-base annuity grew from $6.7B to $8.3B while its share of revenue held near 36% of a much larger company — the team has been converting each boom into permanent recurring revenue, which is the single accomplishment most likely to matter in the next downturn.A plan is really just the next promise — and Lam makes its promises quarterly: each earnings release guides the coming quarter’s revenue and adjusted earnings (one-time items set aside) inside explicit ± ranges. That cadence is the plan made visible: no investor-day theatrics — hold the etch-and-deposition position with research spending ({fmtB(E_RD)} in fiscal 2026), grow the installed-base annuity, return the surplus through a dividend raised every year and the {fmtB(BUYBACK_AUTH)} buyback authorization, and prove it one range at a time. Management guides exactly two numbers each quarter — revenue and adjusted earnings (one-time items set aside), both with explicit ± bands — plus a gross-margin corridor; nothing annual, nothing multi-year, nothing to quietly walk down later. Below, the ledger for the past five quarters, plus the promise currently on the table — all post the October 2024 ten-for-one split (accession 0000707549-24-000123), so every figure is on today’s share basis.
| Quarter | Guided revenue | Delivered | Verdict | Guided EPS* | Delivered | Verdict |
|---|---|---|---|---|---|---|
| Q4 FY25 | $5.00B ± $300M | $5.17B | hit | $1.20 ± $0.10 | $1.33 | beat — above the range |
| Q1 FY26 | $5.20B ± $300M | $5.32B | hit | $1.20 ± $0.10 | $1.26 | hit |
| Q2 FY26 | $5.20B ± $300M | $5.34B | hit | $1.15 ± $0.10 | $1.27 | beat — above the range |
| Q3 FY26 | $5.70B ± $300M | $5.84B | hit | $1.35 ± $0.10 | $1.47 | beat — above the range |
| Q4 FY26 | $6.60B ± $400M | $6.72B | hit | $1.65 ± $0.15 | $1.82 | beat — above the range |
| Q1 FY27 | $8.10B ± $400M | — | in progress | $2.15 ± $0.15 | — | reports late Oct |
The habit worth watching in that table: revenue lands inside the range every time, at or above the midpoint — and earnings clears the ENTIRE range four times in five. That is not luck; it is a guidance culture calibrated to under-promise by roughly one buffer’s width, quarter after quarter. It reframes the September guide: a promise one-fifth above the record just delivered, made by a team whose promises have been floors, not targets. Either the demand is extraordinary, or the culture just changed. The ledger says bet on the former.
Three lines, each indexed to 1.0 at the Q4 FY25 quarter: what management guided, what it Delivered, and what the market paid for the shares. Guidance rose 1.38× and delivery tracked it at 1.37× — from a base quarter that was itself an above-range beat, with four of five quarters clearing the entire guided range. The market line, 4.5× over the same five quarters, is the multiple doing the rest — the Valuation tab’s subject.
The plan from here, as guided: a $8.1B September quarter — one-fifth larger than the record just delivered — with $2.4B of deferred revenue already contracted toward it (accession 0000707549-26-000033). The ledger says take the range seriously. The Valuation tab notes the market already has.
What to watch from here, in order: whether the $8.1B promise lands (late October, the next graded row); whether the memory share of systems — 39% in fiscal 2026 — keeps its footing when high-bandwidth-memory ordering normalizes; and whether China’s 33.8% revenue share keeps drifting down as the rest of the world outgrows it. The plan is simple. The ledger is why it is credible.
Two computations put the ledger’s meaning in numbers. Across the five graded quarters, delivered revenue averaged +2.6% versus the guided midpoint and delivered earnings averaged +9.1% — the largest average earnings beat in this coverage, four times clearing the entire guided range. Apply that habit to September and the $8.1B midpoint reads as a floor with history behind it. And note the promised scale: $8.1B annualizes to $32.4B, roughly 39% above the record year just closed, before any growth through fiscal 2027. The 54× multiple is pricing that trajectory and more; the ledger says the trajectory is credible, and the Valuation tab prices the “more.”
A note on holding a quarterly guider: there is no full-year number to anchor on — the information arrives in twelve-week increments, and each can reset the story. That makes this ledger the report’s best early-warning instrument, with an asymmetry worth naming: at the widest premium-to-history in this coverage, a clean guidance record is mostly downside protection that vanishes the first time it breaks. The first quarter to land below its guided midpoint — unprecedented in this sample — would hit the earnings line and the multiple at once. Until then: defend the position, grow the annuity, return the cash, and say exactly what the next quarter will bring.
One more reading of the September promise, against the balance sheet rather than the ledger: $2.4B of deferred revenue means roughly 30% of the guided quarter is already collected cash awaiting delivery — the boldest guide in company history is, in meaningful part, describing orders that are already paid for. That is the strongest kind of guidance a cyclical can give, and it frames the gross-margin corridor guided alongside it (52% ± 1%): management is promising record volume WITHOUT mix degradation. If both land, fiscal 2027 opens at a run-rate the Valuation tab’s red light has already paid for; if either slips, the ledger records its first blemish at the worst possible multiple. Late October answers.
The earlier tabs laid out the business, the people, the balance sheet and the price — the evidence for the investment. This tab does the opposite, on purpose: the surest way to lose money is to settle on a view and stop hunting for the holes in it. So here we go looking for what could make the thesis fail.
Every danger is worth weighing on two axes: how likely it is, and whether the business survives it. A risk that costs a year of growth is a world apart from one that breaks the engine for good — and the balance sheet from the last tab is what usually decides which. We lay out the handful of ways it could go wrong; the weighing is yours.
"Risk comes from not knowing what you are doing." The point of this tab is to know exactly what you are doing: owning the most cyclical franchise in this coverage, with a third of its revenue inside an export-control regime and two-fifths of its systems sold to memory makers, at the widest premium to its own valuation history — in exchange for arguably the strongest demand tailwind any equipment maker has ever had. Every risk below is visible in the ten-year record; the discipline is to weigh them before taking the position, not after.
| If the market pays… | Multiple | Implied price | vs today |
|---|---|---|---|
| One more delivered year, today’s multiple holds | 54× | $399 | +27% |
| Today — earnings flat, multiple holds | 54× | $314 | +0% |
| De-rate to the 5-year average multiple | 26× | $151 | -52% |
| De-rate to the 2022–23 downcycle-low multiple | 9× | $52 | -83% |
A chart cannot tell you what a business is worth — that is for the earlier tabs and your own judgment. What it can show is the terms the market is offering today: whether the stock is stretched far above its own trend and priced for perfection, or has cooled to a calmer, more sensible entry. This is timing in the mildest sense — not prediction, just noticing whether you are chasing the bus or being offered a reasonable seat.
It matters because even a fair price can be bought at an unfortunate moment, right after a sharp run. So this tab reads LRCX’s trend and how far price sits from it — the tactical complement to the valuation question, and the last check before conviction becomes a decision.
The technical read in this report is deliberately primitive: one price, one 1-year moving average, and the direction of that average. No patterns, no oscillators, no targets. The single question is whether the market’s weighing machine is currently trending with you or against you.
The current read, stated fully: price $314, which is about 11% above the 1-year weekly average of $284; the average itself is rising, up +14.2% over the past eight weeks — the steepest average and the widest cushion in this coverage. The house rule grades exactly three states: above a rising average is constructive, below a falling one is broken, everything else is a hold-your-fire. By that rule this chart is constructive, and has been through essentially the entire post-2022 advance.
The same two footnotes apply, scaled up. The average’s steep slope is the June vertical still inside the 30-week window — it will flatten mechanically as those weeks age out. And the 28% July drawdown is recent trend damage: the market has demonstrated the speed at which it reprices this name, in both directions, within a single quarter.
The 52-week range is the emotional bill of ownership: $97 to $433 — a 347% span in one year, the widest in this coverage. Size the position for the demonstrated weather: this stock’s history includes forty-plus-percent drawdowns with the business intact.
What would change the read: a weekly close decisively below the $284 area with the average flattening flips this light to broken — and at 54× reported earnings, a broken trend here is the framework’s full-stop combination, not a dip to average into.
Overhead supply is the near-term texture: everyone who bought between $314 and $433 in the past three months is underwater, and rallies into the $390–$433 zone will meet their relief selling. Bases take time; patience is a position.
| Section | Your Rating | Notes |
|---|---|---|
| Rate each section as you read — your results appear here automatically. | ||
Every number in this report is only useful if it changes how you make a decision. Most investors read, nod, and move on. The ones who build wealth over time do something different — they write things down.
Not because writing is the point. Because writing forces you to be honest with yourself. You cannot write "I believe this business will compound at 15% for the next decade" without immediately knowing whether you actually believe it.
These five questions have no right answers. GARPify has no opinion on what you should decide. That is your job. This is just the structure that makes the job easier.
Take ten minutes. Be honest.
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