Lam Research (NASDAQ:LRCX – Get Free Report) and Allegro MicroSystems (NASDAQ:ALGM – Get Free Report) are both large-cap computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, earnings, institutional ownership, analyst recommendations and dividends.
Earnings & Valuation
This table compares Lam Research and Allegro MicroSystems”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Lam Research | $21.68 billion | 21.51 | $5.36 billion | $5.30 | 70.36 |
| Allegro MicroSystems | $890.10 million | 11.59 | -$14.90 million | ($0.09) | -615.78 |
Institutional and Insider Ownership
84.6% of Lam Research shares are held by institutional investors. Comparatively, 56.5% of Allegro MicroSystems shares are held by institutional investors. 0.3% of Lam Research shares are held by company insiders. Comparatively, 0.4% of Allegro MicroSystems shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a breakdown of recent ratings and price targets for Lam Research and Allegro MicroSystems, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Lam Research | 0 | 6 | 28 | 0 | 2.82 |
| Allegro MicroSystems | 1 | 1 | 10 | 0 | 2.75 |
Lam Research presently has a consensus price target of $334.43, indicating a potential downside of 10.32%. Allegro MicroSystems has a consensus price target of $54.30, indicating a potential downside of 2.02%. Given Allegro MicroSystems’ higher possible upside, analysts clearly believe Allegro MicroSystems is more favorable than Lam Research.
Profitability
This table compares Lam Research and Allegro MicroSystems’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lam Research | 30.94% | 66.21% | 31.61% |
| Allegro MicroSystems | -1.67% | 6.09% | 4.11% |
Risk and Volatility
Lam Research has a beta of 1.85, meaning that its stock price is 85% more volatile than the S&P 500. Comparatively, Allegro MicroSystems has a beta of 1.98, meaning that its stock price is 98% more volatile than the S&P 500.
Summary
Lam Research beats Allegro MicroSystems on 11 of the 14 factors compared between the two stocks.
About Lam Research
Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. The company offers ALTUS systems to deposit conformal films for tungsten metallization applications; SABRE electrochemical deposition products for copper interconnect transition that offers copper damascene manufacturing; SOLA ultraviolet thermal processing products for film treatments; and VECTOR plasma-enhanced CVD ALD products. It also provides SPEED gapfill high-density plasma chemical vapor deposition products; and Striker single-wafer atomic layer deposition products for dielectric film solutions. In addition, the company offers Flex for dielectric etch applications; Kiyo for conductor etch applications; Syndion for through-silicon via etch applications; and Versys metal products for metal etch processes. Further, it provides Coronus bevel clean products to enhance die yield; Da Vinci, DV-Prime, EOS, and SP series products to address various wafer cleaning applications; and Metryx mass metrology systems for high precision in-line mass measurement in semiconductor wafer manufacturing. The company sells its products and services to semiconductors industry in the United States, China, Europe, Japan, Korea, Southeast Asia, Taiwan, and internationally. The company was incorporated in 1980 and is headquartered in Fremont, California.
About Allegro MicroSystems
Allegro MicroSystems, Inc., together with its subsidiaries, designs, develops, manufactures, and markets sensor integrated circuits (ICs) and application-specific analog power ICs for motion control and energy-efficient systems. Its products include magnetic sensor ICs, such as position, speed, and current sensor ICs; and power ICs comprising motor driver ICs, regulator and LED driver ICs, and isolated gate drivers. The company sells its products to original equipment manufacturers and distributors primarily in the automotive and industrial markets through its direct sales force, third party distributors, independent sales representatives, and consignment. It operates in the United States, rest of the Americas, Europe, Japan, Greater China, South Korea, and other Asian markets. The company was founded in 1990 and is headquartered in Manchester, New Hampshire. Allegro MicroSystems, Inc. is a subsidiary of Sanken Electric Co., Ltd.
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