The shares of Lam Research Corporation (NASDAQ:LRCX) and Dick’s Sporting Goods Inc (NYSE:DKS) were among the active stocks of the last trading sessions. Lam Research Corporation (NASDAQ:LRCX) soared to 3.02% closing at the price of $152.07 whereas the shares of Dick’s Sporting Goods Inc (NYSE:DKS) soared 0.35% with the increase of 0.13 points closing at the price of $37.51. Lam Research Corporation has currently decrease -23.86% in its stock over the period of 6-months while its rival Dick’s Sporting Goods Inc added 21.63% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Lam Research Corporation (NASDAQ:LRCX) is 33.3% while the ROI of Dick’s Sporting Goods Inc (NYSE:DKS) is 15.6%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, LRCX’s EBITDA Margin is 6.15 whereas DKS’s is 4.67.
Both the profitability ratios suggest that Lam Research Corporation (NASDAQ:LRCX) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Lam Research Corporation (NASDAQ:LRCX) reported $3.36/share EPS for the previous quarter where analysts were predicting an EPS to be $3.22/share Thus beating the analyst Estimates with a Surprise Factor of 4.3 Percent. While, Dick’s Sporting Goods Inc (NYSE:DKS) reported EPS of $1.2/share in the last quarter. The analysts projected EPS of $1.06/share depicting a Surprise of 13.2 Percent.
Taking a look at Earnings per Share, Dick’s Sporting Goods Inc tends to be beating the analyst estimates more than Lam Research Corporation. so DKS is more profitable than LRCX.
Technical Analysis of Lam Research Corporation & Dick’s Sporting Goods Inc
Moving average convergence divergence (MACD) shows that Lam Research Corporation (NASDAQ:LRCX) is on a PRICE RELATIVITY trend While Dick’s Sporting Goods Inc (NYSE:DKS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Lam Research Corporation was in BULLISH territory and Dick’s Sporting Goods Inc was in BULLISH territory.
LRCX’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While DKS’s candle is BULLISH with HIGH.
EPS Growth Rate: LRCX’s 11.07% versus DKS’s 0.7%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Lam Research Corporation (NASDAQ:LRCX) is predicted at 11.07% while Dick’s Sporting Goods Inc (NYSE:DKS) stands at 0.7%. These numbers suggest that LRCX is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of LRCX stands at 2.7 while DKS is at 1.5 whereas the debt ratio of the prior is 0.45 while the debt ratio of the later is 0.09.
The values of the both ratios suggest that LRCX is more suitable investment when the liquidity and risk is the main concern.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.2 for LRCX and 2.6 for DKS which means LRCX has Hold rating whereas DKS has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for LRCX is $197.26 which is 22.91% of its current price while DKS has price target of 38.9 which is 3.57% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
LRCX currently has price to earning P/E ratio of 8.91 whereas DKS has 11.53 while the forward P/E ratio for the prior stands at 9.1 and for the later it depicts the value of 11.39.
The price to Book P/B for LRCX is 4.45, Price to Sale is at 2.16 and for DKS these ratios stand at 1.92 and 0.43.