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KLA Corp KLAC

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Stock XNAS Rating as of
$706.26 +33.31 (4.95%)
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Company Report

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KLA Earnings: Signs of a Rebound in Chip Equipment Spending Spark Optimism

William Kerwin, Verushka Shetty

We raise our fair value estimate for shares of wide-moat KLA to $530 from $510 after the firm’s March-quarter results came in above our expectations. Guidance for the June quarter is in line with our forecasts and also tracks well with our longer-term recovery expectations for semiconductor equipment spending. We continue to expect KLA to grow in line with the wafer front-end equipment market in calendar 2024 following a cyclical downturn resulting in revenue decline over calendar 2023. Even with our fair value increase supported by increased confidence in a multiyear recovery, we continue to view the stock as overvalued.

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Price vs Fair Value

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KLAC is trading at a 27% premium.
Price
$648.21
Fair Value
$727.00
Uncertainty
High
1-Star Price
$972.50
5-Star Price
$235.00
Economic Moat
Ndw
Capital Allocation
Vnvpyklhy

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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News

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Trading Information

Previous Close Price
$672.95
Day Range
$678.81–710.26
52-Week Range
$369.00–729.15
Bid/Ask
$705.01 / $710.65
Market Cap
$95.51 Bil
Volume/Avg
1.2 Mil / 932,697

Key Statistics

Price/Earnings (Normalized)
30.99
Price/Sales
10.04
Dividend Yield (Trailing)
0.82%
Dividend Yield (Forward)
0.86%
Total Yield
2.36%

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
15,210
Website
https://www.kla.com

Competitors

Valuation

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Metric
KLAC
LRCX
ASML
Price/Earnings (Normalized)
 30.9932.9746.71
Price/Book Value
 31.3914.6924.34
Price/Sales
 10.048.4112.78
Price/Cash Flow
 29.1628.9839.42
Price/Earnings
KLAC
LRCX
ASML

Financial Strength

Metric
KLAC
LRCX
ASML
Quick Ratio
 1.361.950.76
Current Ratio
 2.143.061.54
Interest Coverage
 10.7620.98—
Quick Ratio
KLAC
LRCX
ASML

Profitability

Metric
KLAC
LRCX
ASML
Return on Assets (Normalized)
 21.63%19.81%19.23%
Return on Equity (Normalized)
 104.42%45.47%60.82%
Return on Invested Capital (Normalized)
 35.71%28.12%44.24%
Return on Assets
KLAC
LRCX
ASML
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Semiconductor Equipment & Materials Industry Comparables

Screen in Investor
Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
ASMLF
ASML Holding NVNfnthhfwmTkty$352.0 Bil
ASML
ASML Holding NV ADRVclwdqlcVwz$352.0 Bil
AMAT
Applied Materials IncTmrnrffstSjwg$169.0 Bil
LRCX
Lam Research CorpTtkjrfnkmmBtlnm$121.3 Bil
TOELF
Tokyo Electron Ltd—Cwk$100.2 Bil
TOELY
Tokyo Electron Ltd ADR—Sxvwr$100.2 Bil
ASMIY
ASM International NV ADR—Wtln$32.8 Bil
ASMXF
ASM International NV—Cdrh$32.8 Bil
TER
Teradyne IncYmbgxwnfqYfy$17.5 Bil

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