Stock Analysis on Net
Stock Analysis on Net

Lam Research Corp. (NASDAQ:LRCX)

$24.99

Economic Value Added (EVA)

Microsoft Excel

EVA is registered trademark of Stern Stewart.

Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

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Economic Profit

Lam Research Corp., economic profit calculation

US$ in thousands

Microsoft Excel
12 months ended: Jun 30, 2024 Jun 25, 2023 Jun 26, 2022 Jun 27, 2021 Jun 28, 2020 Jun 30, 2019
Net operating profit after taxes (NOPAT)1
Cost of capital2
Invested capital3
 
Economic profit4

Based on: 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), 10-K (reporting date: 2020-06-28), 10-K (reporting date: 2019-06-30).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =

Item Description The company
Economic profit Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital. Lam Research Corp. economic profit decreased from 2022 to 2023 and from 2023 to 2024.

Net Operating Profit after Taxes (NOPAT)

Lam Research Corp., NOPAT calculation

US$ in thousands

Microsoft Excel
12 months ended: Jun 30, 2024 Jun 25, 2023 Jun 26, 2022 Jun 27, 2021 Jun 28, 2020 Jun 30, 2019
Net income
Deferred income tax expense (benefit)1
Increase (decrease) in allowance2
Increase (decrease) in deferred revenue3
Increase (decrease) in product warranty reserves4
Increase (decrease) in restructuring liability5
Increase (decrease) in equity equivalents6
Interest expense
Interest expense, operating lease liability7
Adjusted interest expense
Tax benefit of interest expense8
Adjusted interest expense, after taxes9
(Gain) loss on marketable securities
Interest income
Investment income, before taxes
Tax expense (benefit) of investment income10
Investment income, after taxes11
Net operating profit after taxes (NOPAT)

Based on: 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), 10-K (reporting date: 2020-06-28), 10-K (reporting date: 2019-06-30).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in allowance.

3 Addition of increase (decrease) in deferred revenue.

4 Addition of increase (decrease) in product warranty reserves.

5 Addition of increase (decrease) in restructuring liability.

6 Addition of increase (decrease) in equity equivalents to net income.

7 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =

8 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =

9 Addition of after taxes interest expense to net income.

10 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =

11 Elimination of after taxes investment income.

Item Description The company
NOPAT Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income. Lam Research Corp. NOPAT decreased from 2022 to 2023 and from 2023 to 2024.

Cash Operating Taxes

Lam Research Corp., cash operating taxes calculation

US$ in thousands

Microsoft Excel
12 months ended: Jun 30, 2024 Jun 25, 2023 Jun 26, 2022 Jun 27, 2021 Jun 28, 2020 Jun 30, 2019
Provision for income taxes
Less: Deferred income tax expense (benefit)
Add: Tax savings from interest expense
Less: Tax imposed on investment income
Cash operating taxes

Based on: 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), 10-K (reporting date: 2020-06-28), 10-K (reporting date: 2019-06-30).

Item Description The company
Cash operating taxes Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction. Lam Research Corp. cash operating taxes decreased from 2022 to 2023 and from 2023 to 2024.

Invested Capital

Lam Research Corp., invested capital calculation (financing approach)

US$ in thousands

Microsoft Excel
Jun 30, 2024 Jun 25, 2023 Jun 26, 2022 Jun 27, 2021 Jun 28, 2020 Jun 30, 2019
Current portion of long-term debt and finance lease obligations
Long-term debt and finance lease obligations, less current portion
Operating lease liability1
Total reported debt & leases
Stockholders’ equity
Net deferred tax (assets) liabilities2
Allowance3
Deferred revenue4
Product warranty reserves5
Restructuring liability6
Equity equivalents7
Accumulated other comprehensive (income) loss, net of tax8
Adjusted stockholders’ equity
Invested capital

Based on: 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), 10-K (reporting date: 2020-06-28), 10-K (reporting date: 2019-06-30).

1 Addition of capitalized operating leases.

2 Elimination of deferred taxes from assets and liabilities. See details »

3 Addition of allowance for doubtful accounts receivable.

4 Addition of deferred revenue.

5 Addition of product warranty reserves.

6 Addition of restructuring liability.

7 Addition of equity equivalents to stockholders’ equity.

8 Removal of accumulated other comprehensive income.

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. Lam Research Corp. invested capital increased from 2022 to 2023 but then slightly decreased from 2023 to 2024.

Cost of Capital

Lam Research Corp., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Long-term debt and finance lease obligations3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2024-06-30).

1 US$ in thousands

2 Equity. See details »

3 Long-term debt and finance lease obligations. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Long-term debt and finance lease obligations3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2023-06-25).

1 US$ in thousands

2 Equity. See details »

3 Long-term debt and finance lease obligations. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Long-term debt and finance lease obligations3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2022-06-26).

1 US$ in thousands

2 Equity. See details »

3 Long-term debt and finance lease obligations. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Long-term debt and finance lease obligations3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2021-06-27).

1 US$ in thousands

2 Equity. See details »

3 Long-term debt and finance lease obligations. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Long-term debt and finance lease obligations3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2020-06-28).

1 US$ in thousands

2 Equity. See details »

3 Long-term debt and finance lease obligations. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Long-term debt and finance lease obligations3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2019-06-30).

1 US$ in thousands

2 Equity. See details »

3 Long-term debt and finance lease obligations. See details »

4 Operating lease liability. See details »

Economic Spread Ratio

Lam Research Corp., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2024 Jun 25, 2023 Jun 26, 2022 Jun 27, 2021 Jun 28, 2020 Jun 30, 2019
Selected Financial Data (US$ in thousands)
Economic profit1
Invested capital2
Performance Ratio
Economic spread ratio3
Benchmarks
Economic Spread Ratio, Competitors4
Advanced Micro Devices Inc.
Analog Devices Inc.
Applied Materials Inc.
Broadcom Inc.
First Solar Inc.
Intel Corp.
KLA Corp.
Micron Technology Inc.
Monolithic Power Systems Inc.
NVIDIA Corp.
Qualcomm Inc.
Texas Instruments Inc.

Based on: 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), 10-K (reporting date: 2020-06-28), 10-K (reporting date: 2019-06-30).

1 Economic profit. See details »

2 Invested capital. See details »

3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =

4 Click competitor name to see calculations.

Performance ratio Description The company
Economic spread ratio The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital. Lam Research Corp. economic spread ratio deteriorated from 2022 to 2023 and from 2023 to 2024.

Economic Profit Margin

Lam Research Corp., economic profit margin calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2024 Jun 25, 2023 Jun 26, 2022 Jun 27, 2021 Jun 28, 2020 Jun 30, 2019
Selected Financial Data (US$ in thousands)
Economic profit1
 
Revenue
Add: Increase (decrease) in deferred revenue
Adjusted revenue
Performance Ratio
Economic profit margin2
Benchmarks
Economic Profit Margin, Competitors3
Advanced Micro Devices Inc.
Analog Devices Inc.
Applied Materials Inc.
Broadcom Inc.
First Solar Inc.
Intel Corp.
KLA Corp.
Micron Technology Inc.
Monolithic Power Systems Inc.
NVIDIA Corp.
Qualcomm Inc.
Texas Instruments Inc.

Based on: 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), 10-K (reporting date: 2020-06-28), 10-K (reporting date: 2019-06-30).

1 Economic profit. See details »

2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenue
= 100 × ÷ =

3 Click competitor name to see calculations.

Performance ratio Description The company
Economic profit margin The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin. Lam Research Corp. economic profit margin deteriorated from 2022 to 2023 and from 2023 to 2024.