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Lam Research Corp (LRCX) — WACC Analysis

WACC Breakdown

Lam Research Corp (LRCX) has a weighted average cost of capital (WACC) of 12.0%. The cost of equity is 12.1%, derived from a beta of 1.96 and a risk-free rate of 5.2%. The after-tax cost of debt is 3.3%. The capital structure is 98.9% equity and 1.1% debt.

Interpretation

A WACC of 12.0% indicates that the market perceives Lam Research Corp as higher-risk, requiring a greater return to compensate investors.

Investors can compare LRCX's WACC of 12.0% against industry peers to gauge its relative financing costs. A beta of 1.96 reflects the stock's volatility relative to the broader market.

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VALUATION

LRCX WACC: 12.03% for Lam Research Corp

Current inputs imply a 12.13% cost of equity and a 4.21% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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WACC Calculation Process
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Market Data Loaded
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Company Data Fetched
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Beta Calculated (5Y)
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Inputs Auto-Populated
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WACC Calculated
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Step 2: Enter Ticker Symbol
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Step 4: Review Auto-Populated WACC Inputs

Values are automatically populated from real data. You can adjust them manually if needed.

4.30%
1.000
4.23%
5.00%
21.00%
70.00%
Debt: 30.00%Equity: 70.00%

Please enter a valid company ticker to calculate WACC

Lam Research Corp Common Stock (LRCX) WACC Results
Weighted Average Cost of Capital
12.03%
Cost of Equity
12.13%
Risk-Free Rate5.19%
Beta1.96
Market Risk Premium4.23%
Cost of Debt
3.32%
Pre-Tax Cost of Debt4.21%
Tax Rate21.00%
Tax Shield0.88%
Capital Structure
Equity: 98.94%($347.22B)
Debt: 1.06%($3730.49M)
Equity Component
12.00%
98.94% × 12.13%
Debt Component
0.04%
1.06% × 3.32%

Lam Research Corp (LRCX) WACC in context

Lam Research Corp (LRCX) currently screens with an estimated WACC of 12.03%. That blends a 12.13% cost of equity, a 4.21% pre-tax cost of debt, and a 98.94% equity weight into the discount rate you would typically use in a DCF model.

screens as a relatively high discount rate, which makes valuation more sensitive to execution and capital structure risk.

What LRCX WACC implies

A 12.03% discount rate screens as a relatively high discount rate, which makes valuation more sensitive to execution and capital structure risk.

How this page calculates LRCX

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 1.96 and equity accounts for 98.94% of capital.

What to do next

Validate business quality on the company page, then carry the same discount-rate assumptions into the DCF page to test fair value sensitivity.

Disclaimer: This is not financial advice. Data sourced from SEC EDGAR and Polygon.io. Past performance does not guarantee future results. Always conduct your own research before making investment decisions.