Discounted Cash Flow (DCF) Analysis Unlevered

Lam Research Corporation (LRCX)

$394.83

-31.32 (-7.35%)

All numbers are in Millions, Currency in USD

Stock DCF: 573.96 | 394.83 | undervalue

Operating Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	11,077	9,653.56	10,044.74	14,626.15	16,420.87	18,435.81	20,698	23,237.77	26,089.19	29,290.49
Revenue (%)
EBITDA	3,575.57	2,873.12	3,020.94	4,886.55	5,153.12	5,785.44	6,495.35	7,292.36	8,187.18	9,191.80
EBITDA (%)
EBIT	3,249.18	2,563.83	2,752.42	4,579.40	4,704.68	5,281.97	5,930.10	6,657.76	7,474.71	8,391.90
EBIT (%)
Depreciation	326.40	309.28	268.53	307.15	448.44	503.47	565.25	634.61	712.48	799.90
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	4,354.79	8,607.26	9,663.43	10,849.19	12,180.45	13,675.07
Total Cash (%)
Account Receivables	2,176.94	1,455.52	2,097.10	3,026.43	3,702.32	3,644.62	4,091.84	4,593.93	5,157.64	5,790.51
Account Receivables (%)
Inventories	1,876.16	1,540.14	1,900.02	2,689.29	3,479.33	3,369.42	3,782.87	4,247.05	4,768.19	5,353.28
Inventories (%)
Accounts Payable	510.98	376.56	592.39	829.71	824.49	925.66	1,039.25	1,166.77	1,309.94	1,470.68
Accounts Payable (%)
Capital Expenditure	-273.47	-303.49	-203.24	-349.10	-411.46	-461.94	-518.63	-582.27	-653.71	-733.93
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 394.83
Beta	1.269
Diluted Shares Outstanding	145.32
Cost of Debt
Tax Rate	10.58
After-tax Cost of Debt	4.47%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.879
Total Debt	5,000.66
Total Equity	57,376.70
Total Capital	62,377.35
Debt Weighting	8.02
Equity Weighting	91.98
Wacc

Build Up Free Cash

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	11,077	9,653.56	10,044.74	14,626.15	16,420.87	18,435.81	20,698	23,237.77	26,089.19	29,290.49
EBITDA	3,575.57	2,873.12	3,020.94	4,886.55	5,153.12	5,785.44	6,495.35	7,292.36	8,187.18	9,191.80
EBIT	3,249.18	2,563.83	2,752.42	4,579.40	4,704.68	5,281.97	5,930.10	6,657.76	7,474.71	8,391.90
Tax Rate	24.47%	10.43%	12.55%	10.58%	14.51%	14.51%	14.51%	14.51%	14.51%	14.51%
EBIAT	2,454.24	2,296.46	2,406.92	4,094.99	4,022.21	4,515.75	5,069.87	5,691.97	6,390.41	7,174.55
Depreciation	326.40	309.28	268.53	307.15	448.44	503.47	565.25	634.61	712.48	799.90
Accounts Receivable	-	721.41	-641.58	-929.33	-675.89	57.70	-447.22	-502.09	-563.70	-632.87
Inventories	-	336.02	-359.88	-789.27	-790.04	109.91	-413.45	-464.18	-521.14	-585.09
Accounts Payable	-	-134.42	215.83	237.32	-5.22	101.17	113.58	127.52	143.17	160.74
Capital Expenditure	-273.47	-303.49	-203.24	-349.10	-411.46	-461.94	-518.63	-582.27	-653.71	-733.93
UFCF	2,507.17	3,225.27	1,686.57	2,571.77	2,588.05	4,826.06	4,369.40	4,905.56	5,507.50	6,183.30
WACC
PV UFCF					2,588.05	4,446.75	3,709.56	3,837.42	3,969.68	4,106.50
SUM PV UFCF										20,069.90

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.53
Free cash flow (t + 1)	6,306.97
Terminal Value	96,584.51
Present Value of Terminal Value	64,144.36

Intrinsic Value

Enterprise Value	84,214.26
Net Debt	805.94
Equity Value	83,408.32
Shares Outstanding	145.32
Equity Value Per Share	573.96