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KLA Corp KLAC

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Stock XNAS Rating as of
$200.33 +5.40 (2.77%)
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KLA Dominates High-Profit Process Control, and Should Reap the Benefits of AI Investment

William Kerwin

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 LOCK|RkVYN@< premium.
Price
$194.93
Fair Value
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Uncertainty
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1-Star Price
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5-Star Price
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Economic Moat
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Capital Allocation
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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
$194.93
Day Range
$194.90–201.98
52-Week Range
$98.10–307.37
Bid/Ask
$200.58 / $201.10
Shares Outstanding
1.31B
Market Cap
$261.43B
Volume/Avg
9M / 11M

Key Statistics

Price/Earnings (Normalized)
53.33
Price/Sales
19.47
Dividend Yield (Trailing)
0.42%
Dividend Yield (Forward)
0.46%
Dividend Payment Schedule
Mar, Jun, Sep, Dec
Total Yield
1.23%

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 Growth
Total Number of Employees
17,200
Website
https://www.kla.com

Competitors

Valuation

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Metric
KLAC
ASML
AMAT
Price/Earnings (Normalized)
 53.3356.4048.46
Price/Book Value
 41.2327.8716.39
Price/Sales
 19.4716.9513.71
Price/Cash Flow
 47.0547.8346.91
Price/Earnings
KLAC
ASML
AMAT

Financial Strength

Metric
KLAC
ASML
AMAT
Quick Ratio
 1.880.731.67
Current Ratio
 2.881.332.42
Interest Coverage
 20.09—33.00
Quick Ratio
KLAC
ASML
AMAT

Profitability

Metric
KLAC
ASML
AMAT
Return on Assets (Normalized)
 29.54%21.77%22.69%
Return on Equity (Normalized)
 90.75%52.59%39.18%
Return on Invested Capital (Normalized)
 43.62%45.10%25.01%
Return on Assets
KLAC
ASML
AMAT

Semiconductor Equipment & Materials Industry Comparables

Screen With Investor
1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
ASML Holding NV
ASMLF
LOCK|P!wjyRbPLOCK|?c$696B
 ASML Holding NV ADR
ASML
LOCK|QK$^!?>#LOCK|&b$696B
 Lam Research Corp
LRCX
LOCK|Z#hjQGyVLOCK|Dc$411B
 Applied Materials Inc
AMAT
LOCK|Nv!xJP%LOCK|N$$$406B
 Tokyo Electron Ltd
TOELF
———$170B
 Tokyo Electron Ltd ADR
TELWY
———$170B
 Teradyne Inc
TER
LOCK|^<DR&YLOCK|@Y>$63B
 Qnity Electronics Inc
Q
LOCK|>Pb@bqLOCK|wVVL!$26B
 Entegris Inc
ENTG
LOCK|<>N>q?LOCK|!d$$24B

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