Why Is Lam Research (LRCX) Up 16.9% Since Last Earnings Report?

It has been about a month since the last earnings report for Lam Research (LRCX). Shares have added about 16.9% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Lam Research due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.Lam Research Q3 Earnings Surpass Expectations, Revenues Rise Y/YLam Research delivered third-quarter fiscal 2026 results, wherein both top and bottom lines surpassed the Zacks Consensus Estimate. LRCX reported fiscal third-quarter non-GAAP earnings of $1.47 per share, beating the Zacks Consensus Estimate by 8.1%. The bottom line increased 41.3% on a year-over-year basis.In the third quarter of fiscal 2026, LRCX reported revenues of $5.84 billion, which rose 23.8% year over year and surpassed the consensus estimate by 1.3%. Strength was supported by an accelerating AI-driven semiconductor demand backdrop and a record quarter for customer support activities.LRCX Revenue Mix Shows Broad-Based StrengthIn the third quarter of fiscal 2026, Systems revenues were $3.73 billion (63.9% of total revenues), up 24% on a year-over-year basis. The Zacks Consensus Estimate for Systems revenues was pegged at $3.82 billion.Customer Support Business Group revenues totaled $2.11 billion (36.1% of total revenues), which increased 25.3% on a year-over-year basis, reflecting continued expansion across spares, upgrades and services. The Zacks Consensus Estimate for Customer Support Business Group revenues was pegged at $1.93 billion.During the quarter, China contributed 34% of total revenues, Taiwan 23%, and Korea 23%. Other regions like Japan contributed 8%, the United States 6%, Southeast Asia 4%, and Europe 2%.LRCX Profitability Improves on Mix and Factory EfficienciesLam Research posted fiscal third-quarter non-GAAP gross margin of 49.9%, improving 20 basis points from 49.7% in the previous quarter. Management attributed performance to a favorable customer and product mix as well as improved factory efficiencies, supported by prior work to enhance the global manufacturing footprint.Non-GAAP operating expenses were $866 million in the fiscal third quarter, up from $827 million in the prior quarter, driven by seasonal employee-related costs and higher headcount to support growth.Even with higher spending, non-GAAP operating margin expanded 70 basis points to 35.0%, up from 34.3% in the previous quarter.LRCX’s Balance Sheet & Cash FlowAs of March 29, 2026, Lam Research held $4.8 billion in cash and cash equivalents, down from $6.2 billion at the end of the prior quarter.Cash flows from operating activities decreased to $1.14 billion, down from $1.48 billion in the previous quarter.During the quarter, Lam Research paid dividends totaling $325.8 million and repurchased shares worth $796 million.LRCX Provides Strong Guidance for Q4For the fourth quarter of fiscal 2026, Lam Research expects revenues to be $6.60 billion (+/- $400 million). The company forecasts non-GAAP gross margin of 50.5% (+/- 1%) and non-GAAP operating margin of 36.5% (+/- 1%). Lam Research guided non-GAAP earnings of $1.65 per share (+/- $0.15), based on a diluted share count of 1.26 billion.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a upward trend in estimates review.The consensus estimate has shifted 16.48% due to these changes.VGM ScoresCurrently, Lam Research has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock has a score of F on the value side, putting it in the bottom 20% quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Lam Research has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks