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Lam Research (Lam Research) Forward Rate of Return (Yacktman) %

: 22.88% (As of Dec. 2023)
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Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. Lam Research's forward rate of return for was 22.88%.

The historical rank and industry rank for Lam Research's Forward Rate of Return (Yacktman) % or its related term are showing as below:

LRCX' s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: 4.43   Med: 22.97   Max: 26.09
Current: 22.54

During the past 13 years, Lam Research's highest Forward Rate of Return was 26.09. The lowest was 4.43. And the median was 22.97.

LRCX's Forward Rate of Return (Yacktman) % is ranked better than
86.73% of 535 companies
in the Semiconductors industry
Industry Median: 13.07 vs LRCX: 22.54

Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past seven years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.


Lam Research Forward Rate of Return (Yacktman) % Historical Data

The historical data trend for Lam Research's Forward Rate of Return (Yacktman) % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Lam Research Annual Data
Trend Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21 Jun22 Jun23
Forward Rate of Return (Yacktman) %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 25.33 23.67 22.31 23.95 23.25

Lam Research Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
Forward Rate of Return (Yacktman) % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 24.31 23.86 23.25 23.42 22.88

Competitive Comparison

For the Semiconductor Equipment & Materials subindustry, Lam Research's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Lam Research Forward Rate of Return (Yacktman) % Distribution

For the Semiconductors industry and Technology sector, Lam Research's Forward Rate of Return (Yacktman) % distribution charts can be found below:

* The bar in red indicates where Lam Research's Forward Rate of Return (Yacktman) % falls into.



Lam Research Forward Rate of Return (Yacktman) % Calculation

Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

Lam Research's Forward Rate of Return of Dec. 2023 is

Forward Rate of Return=Normalized Free Cash Flow/Price+5-Year EBITDA Growth Rate
=22.5887619/783.26+0.2
=22.88 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Lam Research  (NAS:LRCX) Forward Rate of Return (Yacktman) % Explanation

Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.


Be Aware

In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.


Lam Research Forward Rate of Return (Yacktman) % Related Terms

Thank you for viewing the detailed overview of Lam Research's Forward Rate of Return (Yacktman) % provided by GuruFocus.com. Please click on the following links to see related term pages.


Lam Research (Lam Research) Business Description

Industry
Address
4650 Cushing Parkway, Fremont, CA, USA, 94538
Lam Research is one of the largest semiconductor wafer fabrication equipment, or WFE, manufacturers in the world. It specializes in the market segments of deposition and etch, which entail the buildup of layers on a semiconductor and the subsequent selective removal of patterns from each layer. Lam holds the top market share in etch and holds the clear cut second share in deposition. It is more exposed to memory chipmakers for DRAM and NAND chips. It counts as top customers the largest chipmakers in the world, including TSMC, Samsung, Intel, and Micron.
Executives
Timothy Archer officer: Chief Operating Officer 4650 CUSHING PARKWAY, FREMONT CA 94538
Ava Hahn officer: Chief Legal Officer & SVP 4650 CUSHING PARKWAY, C/O LAM RESEARCH, FREMONT CA 94538
Abhijit Y Talwalkar director ONE AMD PLACE, PO BOX 3453, SUNNYVALE CA 94088
Christina Corrreia officer: CVP , Chief Accounting Officer 4650 CUSHING PKWY, FREMONT CA 94538
Patrick J Lord officer: Group Vice President C/O LAM RESEARCH CORP, 4650 CUSHING PARKWAY, FREMONT CA 94538
John M. Dineen director MERRIMACK PHARMACEUTICALS, INC., ONE KENDALL SQUARE, SUITE B7201, CAMBRIDGE MA 02139
Douglas R Bettinger officer: EVP, Chief Financial Officer C/O LAM RESEARCH CORPORATION, 4650 CUSHING PARKWAY, FREMONT CA 94538
Vahid Vahedi officer: Group Vice President LAM RESEARCH CORPORATION, 4650 CUSHING PARKWAY, FREMONT CA 94538
Neil J Fernandes officer: Senior Vice President 4650 CUSHING PKWY, FREMONT CA 94538
Ho Kyu Kang director 4650 CUSHING PKWY, FREMONT CA 94538
Richard A Gottscho officer: Executive Vice President 4650 CUSHING PARKWAY, FREMONT CA 94538
Sohail U Ahmed director 4650 CUSHING PARKWAY, FREMONT CA 94538
Scott Gerald Meikle officer: Senior Vice President 1007 N. 17TH STREET, BOISE ID 83702
Catherine P Lego director C/O GUIDEWIRE SOFTWARE, INC., 970 PARK PL, SUITE 200, SAN MATEO CA 94403
Seshasayee Varadarajan officer: Group Vice President LAM RESEARCH CORPORATION, 4650 CUSHING PARKWAY, FREMONT CA 94538