Why Lam Research Corporation Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Lam Research Corporation (NASDAQ: LRCX  ) finished the trading day with an 11% gain after an opening-bell pop that followed the company's strong earnings report and upbeat guidance.

So what: Lam reported  revenue of $1.23 billion -- a 39% year-over-year improvement -- and earnings of $1.26 per share for its fiscal third quarter, which ended in March. Both figures topped analyst expectations, which had sought $1.22 billion in revenue and $1.16 in EPS. Lam also issued guidance for the in-progress fourth quarter: The company expects revenue to fall in the range of $1.235 to $1.245, and EPS to range from $1.14 to $1.28. Both projections topped those of Wall Street, which had modeled $1.16 billion in revenue and $1.09 in EPS.

Now what: Lam has ridden big surges and large multi-quarter drops in its core metrics before, and it appears that the company is going to continue to ride a wave of positive momentum through the end of this fiscal year, at least. The company's P/E is also near its lowest point in over a year despite the strong share-price gains made since the start of 2013. It might be worthwhile to dig further into Lam's growth prospects -- this could be an intriguing play for the rest of the year.

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Alex Planes

Alex Planes specializes in the deep analysis of tech, energy, and retail companies, with a particular focus on the ways new or proposed technologies can (and will) shape the future. He is also a dedicated student of financial and business history, often drawing on major events from the past to help readers better understand what's happening today and what might happen tomorrow.

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