Lam Research Corporation (LRCX): investment thesis checklist
What a value investor writing down why they own Lam Research Corporation would be relying on, read from its filings: the figures that have carried the business, the lines a reader might set on them, and the published tests it meets today. A list to write against, not a view on the company.
1. The figures the case would rest on
- Return on invested capital: 65.5% in FY2026; between 37.4% and 65.5% over 7 filed years, median 59.2%. Does the thesis need it to stay inside that range?
- Return on equity: 58.3% in FY2026; between 24.9% and 73.3% over 10 filed years, median 50.6%. Does the thesis need it to stay inside that range?
- Free cash flow yield: 1.0% in FY2026; between 1.0% and 9.6% over 10 filed years, median 4.3%. Does the thesis need it to stay inside that range?
- EV to EBIT: 58.12x in FY2026; between 12.08x and 58.12x over 7 filed years, median 20.61x. Does the thesis need it to stay inside that range?
- Price to earnings: 65.81x in FY2026; between 13.26x and 65.81x over 10 filed years, median 19.19x. Does the thesis need it to stay inside that range?
- Gross margin: 50.5% in FY2026; between 44.6% and 50.5% over 10 filed years, median 46.2%. Does the thesis need it to stay inside that range?
- Operating margin: 35.3% in FY2026; between 23.7% and 35.3% over 10 filed years, median 29.4%. Does the thesis need it to stay inside that range?
- Net debt to EBITDA: -0.17x in FY2026; between -0.26x and 0.36x over 7 filed years, median -0.02x. Does the thesis need it to stay inside that range?
- Revenue growth, 5-year CAGR: 9.7% in FY2026; between 9.1% and 25.2% over 10 filed years, median 14.9%. Does the thesis need it to stay inside that range?
- Share count change: -2.3% in FY2026; between -11.5% and -1.6% over 9 filed years, median -2.8%. Does the thesis need it to stay inside that range?
2. What must stay true: guardrails a reader might set
Each line is drafted from Lam Research Corporation's own current figure, never from a level we think a business should clear, and replayed over its filed years. They are a reader's to keep, edit or drop.
Debt to Equity stays at or below 0.41x
Today 0.33x. Replayed over 7 filed years, it would have broken in 6; most recently FY2025, at 0.48x (10-K, filed 2025-08-11).
Return on Invested Capital stays at or above 52.4%
Today 65.54%. This indicator depends on inputs (market price, multi-statement composites) whose history is not deep enough to re-derive it with the same formula as the live value, so no honest retro-test exists for it.
Dividend Rate stays at or above $1.30
Today $1.32. This indicator depends on inputs (market price, multi-statement composites) whose history is not deep enough to re-derive it with the same formula as the live value, so no honest retro-test exists for it.
3. What would break it
- A filed year in which debt to equity rose above 0.41x.
- A filed year in which return on invested capital fell below 52.4%.
- A filed year in which dividend rate fell below $1.30.
4. The published tests it meets today
Of 30 tests value investors published: 7 met, 23 not met, 0 we could not complete. Counts, never a score.
Meets: High returns and growth; Gross margin, turnover (Robert Novy-Marx); ROIC at or above WACC; Z-score and coverage (Edward Altman); High returns, low debt; High return on tangibles; Cash-covered dividend.
What this cannot tell you
What the numbers say today, not the day one stops being true. The reasons are not written down.
An account adds
One email the night a number you wrote down breaks. Silence otherwise.
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How this is computedA computation on accounts filed with the SEC, not a recommendation and not advice. Past filings do not indicate future results. Risk disclaimer.