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KLA Corp KLAC

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Stock XNAS Rating as of
$798.16 +3.78 (0.48%)
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Company Report

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KLA Leads the Process Control Section of the WFE Market and Merits a Wide Moat

William Kerwin, Verushka Shetty

KLA is one of the largest providers in the world of wafer fabrication equipment for semiconductors, specializing in process control, where we expect its unmatched breadth and depth to defend and increase its market share. We believe trends toward higher complexity in chips will drive increasing demand and strong pricing for KLA’s equipment, including artificial intelligence and new technologies like high-bandwidth memory. We particularly like that KLA boasts the highest profit margins out of any WFE firm under our coverage.

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Price vs Fair Value

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KLAC is trading at a 686% premium.
Price
$794.38
Fair Value
$821.00
Uncertainty
High
1-Star Price
$646.20
5-Star Price
$521.00
Economic Moat
Qng
Capital Allocation
Vsqjvxtcf

Bulls Say, Bears Say

Bulls

KLA dominates the process control market within WFE, with a majority market share more than quadrupling that of its next closest competitor, Applied Materials.

Bears

KLA has a smaller budget than other giant WFE peers like Applied Materials and ASML, and risks losing market share if those firms were to invest more than it is able to.

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Trading Information

Previous Close Price
$794.38
Day Range
$781.92–798.66
52-Week Range
$440.15–798.66
Bid/Ask
$797.00 / $799.90
Market Cap
$107.46 Bil
Volume/Avg
590,023 / 839,327

Key Statistics

Price/Earnings (Normalized)
35.38
Price/Sales
11.37
Dividend Yield (Trailing)
0.71%
Dividend Yield (Forward)
0.73%
Total Yield
2.12%

Company Profile

KLA is one of the largest semiconductor wafer fabrication equipment, or WFE, manufacturers in the world. It specializes in the market segment of semiconductor process control, wherein machines inspect semiconductor wafers during research and development and manufacturing for defects and verify precise measurements. In this section of the market, KLA holds a majority share. It also has a small exposure to the etch and deposition segments of the WFE market. It counts as top customers the largest chipmakers in the world, including TSMC and Samsung.
Sector
Technology
Industry
Semiconductor Equipment & Materials
Stock Style Box
Large Core
Total Number of Employees
15,210
Website
https://www.kla.com

Competitors

Valuation

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Metric
KLAC
ASML
AMAT
Price/Earnings (Normalized)
 35.3852.6627.91
Price/Book Value
 34.7427.4410.46
Price/Sales
 11.3714.407.29
Price/Cash Flow
 32.0244.4424.55
Price/Earnings
KLAC
ASML
AMAT

Financial Strength

Metric
KLAC
ASML
AMAT
Quick Ratio
 1.360.761.82
Current Ratio
 2.141.542.80
Interest Coverage
 10.76—32.42
Quick Ratio
KLAC
ASML
AMAT

Profitability

Metric
KLAC
ASML
AMAT
Return on Assets (Normalized)
 21.67%19.23%22.48%
Return on Equity (Normalized)
 104.66%60.82%42.56%
Return on Invested Capital (Normalized)
 35.79%44.24%28.55%
Return on Assets
KLAC
ASML
AMAT
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Semiconductor Equipment & Materials Industry Comparables

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1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
ASML Holding NV
ASMLF
JlfytrxjRhlrm$409.7 Bil
 ASML Holding NV ADR
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QhygkzdglQpw$409.7 Bil
 Applied Materials Inc
AMAT
LtfgcddsqbTzgn$183.6 Bil
 Lam Research Corp
LRCX
FrldrdhfyMfvs$130.7 Bil
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—Tsjt$104.8 Bil
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XdzhvjvYfps$22.6 Bil

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