Using the PEG framework with analyst consensus forward EPS growth of 20.9% plus 0.4% dividend yield, Lam Research Corporation has a fair value of $111.19 based on NTM EPS (FY2026) of $5.32. The current PEG ratio is 1.92.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG is most informative for high-growth companies — the PEG sweet spot.
| EPS Growth RateForward | 20.5% |
| Dividend Yield | +0.4% |
| Adjusted Growth (clamped 8–25%) | 20.9% |
| Fair P/E | 20.9x |
| NTM EPS (FY2026) | $5.32 |
| Fair Value | $111.19 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $4.15 | — | — |
| FY2026E | $5.32 | +28.3% | 26 |
| FY2027E | $7.06 | +32.6% | 25 |
| FY2028E | $8.09 | +14.6% | 20 |
| FY2029E | $8.74 | +8.0% | 10 |
4Y Forward EPS CAGR: 20.5%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $3.9B | $2.69 | — |
| FY2022 | $4.6B | $3.27 | +21.6% |
| FY2023 | $4.5B | $3.32 | +1.5% |
| FY2024 | $3.8B | $2.90 | -12.7% |
| FY2025 | $5.4B | $4.15 | +43.1% |
4Y Historical EPS CAGR: 11.4%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.