Discounted Cash Flow (DCF) Analysis Unlevered

Lam Research Corporation (LRCX)

$494.14

+24.74 (+5.27%)

All numbers are in Millions, Currency in USD

Stock DCF: 620.53 | 494.14 | undervalue

Operating Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	11,077	9,653.56	10,044.74	14,626.15	17,227.04	19,578.28	22,250.44	25,287.31	28,738.67	32,661.09
Revenue (%)
EBITDA	3,575.57	2,873.12	3,020.94	4,886.55	5,526.85	6,171.41	7,013.72	7,970.99	9,058.92	10,295.33
EBITDA (%)
EBIT	3,249.18	2,563.83	2,752.42	4,579.40	5,193.11	5,667.81	6,441.39	7,320.55	8,319.70	9,455.22
EBIT (%)
Depreciation	326.40	309.28	268.53	307.15	333.74	503.59	572.33	650.44	739.22	840.11
Depreciation (%)

Balance Sheet Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Total Cash	4,949.60	5,431.20	6,710.25	5,729.14	3,657.73	8,933.62	10,152.94	11,538.67	13,113.53	14,903.34
Total Cash (%)
Account Receivables	2,176.94	1,455.52	2,097.10	3,026.43	4,313.82	3,968.16	4,509.76	5,125.27	5,824.80	6,619.80
Account Receivables (%)
Inventories	1,876.16	1,540.14	1,900.02	2,689.29	3,966.29	3,650.09	4,148.27	4,714.45	5,357.91	6,089.19
Inventories (%)
Accounts Payable	510.98	376.56	592.39	829.71	864.97	983.03	1,117.20	1,269.68	1,442.97	1,639.92
Accounts Payable (%)
Capital Expenditure	-273.47	-303.49	-203.24	-349.10	-546.03	-516.57	-587.07	-667.20	-758.26	-861.76
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 494.14
Beta	1.340
Diluted Shares Outstanding	140.63
Cost of Debt
Tax Rate	11.32
After-tax Cost of Debt	4.43%
Risk-Free Rate
Market Risk Premium
Cost of Equity	9.109
Total Debt	4,998.45
Total Equity	69,489.92
Total Capital	74,488.37
Debt Weighting	6.71
Equity Weighting	93.29
Wacc

Build Up Free Cash

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	11,077	9,653.56	10,044.74	14,626.15	17,227.04	19,578.28	22,250.44	25,287.31	28,738.67	32,661.09
EBITDA	3,575.57	2,873.12	3,020.94	4,886.55	5,526.85	6,171.41	7,013.72	7,970.99	9,058.92	10,295.33
EBIT	3,249.18	2,563.83	2,752.42	4,579.40	5,193.11	5,667.81	6,441.39	7,320.55	8,319.70	9,455.22
Tax Rate	24.47%	10.43%	12.55%	10.58%	11.32%	13.87%	13.87%	13.87%	13.87%	13.87%
EBIAT	2,454.24	2,296.46	2,406.92	4,094.99	4,605.29	4,881.75	5,548.04	6,305.27	7,165.85	8,143.89
Depreciation	326.40	309.28	268.53	307.15	333.74	503.59	572.33	650.44	739.22	840.11
Accounts Receivable	-	721.41	-641.58	-929.33	-1,287.39	345.66	-541.60	-615.52	-699.53	-795
Inventories	-	336.02	-359.88	-789.27	-1,277	316.21	-498.18	-566.18	-643.46	-731.28
Accounts Payable	-	-134.42	215.83	237.32	35.26	118.06	134.17	152.48	173.29	196.94
Capital Expenditure	-273.47	-303.49	-203.24	-349.10	-546.03	-516.57	-587.07	-667.20	-758.26	-861.76
UFCF	2,507.17	3,225.27	1,686.57	2,571.77	1,863.86	5,648.70	4,627.68	5,259.30	5,977.12	6,792.91
WACC
PV UFCF						5,191.82	3,909.36	4,083.58	4,265.56	4,455.65
SUM PV UFCF										21,905.98

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.80
Free cash flow (t + 1)	6,928.77
Terminal Value	101,893.63
Present Value of Terminal Value	66,834.79

Intrinsic Value

Enterprise Value	88,740.77
Net Debt	1,476.45
Equity Value	87,264.32
Shares Outstanding	140.63
Equity Value Per Share	620.53