MeritValue

LAM RESEARCH CORP

LRCXdata completeness 100%17 fiscal years on file
The thesis, from the filings

LAM RESEARCH CORP earns about 37% on invested capital, far above its ~9% cost of capital, but has diluted owners by 788% over 5 years — a real edge showing up in the numbers. The estimate methods put fair value between $36.23 and $214.25 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$14.6B1$17.2B2$17.4B3$14.9B3$18.4B3
Net income$3.91B4$4.61B5$4.51B6$3.83B6$5.36B6
Operating cash flow$3.59B7$3.1B8$5.18B9$4.65B9$6.17B9
Capital expenditure$349.1M10$546M11$501.6M12$396.7M12$759.2M12
Free cash flow (derived)$3.24B7$2.55B8$4.68B9$4.26B9$5.41B9
Total debt$9.92B13$9.92B14$9.93B15$9.93B16$8.94B16
Cash & equivalents$4.42B17$3.52B18$5.34B19$5.85B19$6.39B19
Diluted shares145.3M140.6M1.36B1.32B1.29B

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$76.44
your share of equity
Profit it earned you last year
$41.53
Free cash flow it threw off
$41.96
Debt you’d be carrying
$69.28

10 shares is a claim on $76.44 of net worth that earned you $41.53 and generated $41.96 of cash last year, against $69.28 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
37% avg · 5y
FY21 36%FY22 38%FY23 37%FY24 32%FY25 44%

It earned about 37% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
+788% shares · 5y

Share count is up 788% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has held roughly steady.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $36.23 and $214.25 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$214.25
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth20.0%
  • fcfBase$4.68B
DCF · Growth Exit 5Y
$116.23
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth20.0%
  • fcfBase$4.68B
Earnings Power Value
$36.23
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$4.51B
  • growthAssumed0.0%
Graham Number
$26.72
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years20.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $116.23
The three cases
Bear0.0%$49.82
Base20.0%$116.23
Bull20.0%$116.23

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 20.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-06-27 · accession 0000707549-23-000102 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-06-26 · accession 0000707549-24-000106 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-06-25 · accession 0000707549-25-000075 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-06-27 · accession 0000707549-23-000102 (NetIncomeLoss)
  5. 10-K · period ending 2022-06-26 · accession 0000707549-24-000106 (NetIncomeLoss)
  6. 10-K · period ending 2023-06-25 · accession 0000707549-25-000075 (NetIncomeLoss)
  7. 10-K · period ending 2021-06-27 · accession 0000707549-23-000102 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-06-26 · accession 0000707549-24-000106 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-06-25 · accession 0000707549-25-000075 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-06-27 · accession 0000707549-23-000102 (PaymentsToAcquireProductiveAssets)
  11. 10-K · period ending 2022-06-26 · accession 0000707549-24-000106 (PaymentsToAcquireProductiveAssets)
  12. 10-K · period ending 2023-06-25 · accession 0000707549-25-000075 (PaymentsToAcquireProductiveAssets)
  13. 10-K · period ending 2021-06-27 · accession 0000707549-21-000136 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-06-26 · accession 0000707549-23-000102 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-06-25 · accession 0000707549-24-000106 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-06-30 · accession 0000707549-25-000075 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2021-06-27 · accession 0000707549-23-000102 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-06-26 · accession 0000707549-24-000106 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-06-25 · accession 0000707549-25-000075 (CashAndCashEquivalentsAtCarryingValue)