Skip to Content

KLA Corp KLAC

Morningstar Rating
$717.57 +35.27 (5.17%)
View Full Chart
Unlock our analysis with Morningstar Investor

Company Report

KLA Earnings: Our Long-Term Recovery Thesis Is Intact, but Shares Look Rich

We maintain our $510 fair value estimate for shares of wide-moat KLA after the firm’s December-quarter results aligned with our longer-term recovery expectations for semiconductor equipment spending. KLA’s results were right in line with our estimates for the quarter. The firm’s March-quarter guidance missed our model, but this resulted from a large deal pushing out into the June quarter and we don’t see it reflecting fundamental weakness. Overall, we expect KLA to grow in line with the wafer front-end equipment market in calendar 2024 after a downturn that shrank revenue in calendar 2023. Despite the near-term weaker guidance sending shares down 6% after hours, we see shares as overvalued. We believe improved results in 2024 and 2025 are already baked into the stock, and our expectations for the firm’s fundamentals going forward don’t support the current price.

Price vs Fair Value

KLAC is trading at a 41% premium.
Price
$717.57
Fair Value
$252.00
Uncertainty
High
1-Star Price
$869.80
5-Star Price
$543.00
Economic Moat
Zfv
Capital Allocation
Sxknjkmfl

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.

Is it the right time to buy, sell, or hold?
Start a free trial of Morningstar Investor to unlock exclusive ratings and continuous analyst coverage to help you decide if KLAC is a good fit for your portfolio.

News

Trading Information

Previous Close Price
$682.30
Day Range
$688.25719.22
52-Week Range
$355.88719.22
Bid/Ask
$716.01 / $720.00
Market Cap
$97.04 Bil
Volume/Avg
1.1 Mil / 907,954

Key Statistics

Price/Earnings (Normalized)
31.49
Price/Sales
10.20
Dividend Yield (Trailing)
0.77%
Dividend Yield (Forward)
0.81%
Total Yield
2.44%

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

Competitors

Valuation

Metric
KLAC
ASML
AMAT
Price/Earnings (Normalized)
31.4945.8726.12
Price/Book Value
31.8926.2210.02
Price/Sales
10.2013.106.68
Price/Cash Flow
29.6239.6322.33
Price/Earnings
KLAC
ASML
AMAT

Financial Strength

Metric
KLAC
ASML
AMAT
Quick Ratio
1.160.881.77
Current Ratio
1.911.502.71
Interest Coverage
11.2659.2224.60
Quick Ratio
KLAC
ASML
AMAT

Profitability

Metric
KLAC
ASML
AMAT
Return on Assets (Normalized)
22.38%21.48%22.91%
Return on Equity (Normalized)
109.87%73.05%44.88%
Return on Invested Capital (Normalized)
37.13%52.22%30.44%
Return on Assets
KLAC
ASML
AMAT
See how this stock stacks up to its competitors with Morningstar Investor

Semiconductor Equipment & Materials Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
ASMLF
ASML Holding NVDqgn$381.1 Bil
ASML
ASML Holding NV ADRKbnbh$381.1 Bil
AMAT
Applied Materials IncYhvvf$174.7 Bil
LRCX
Lam Research CorpVnbt$128.7 Bil
TOELF
Tokyo Electron LtdCjyzs$118.4 Bil
TOELY
Tokyo Electron Ltd ADRKxrp$118.4 Bil
DSCSY
Disco Corp ADRLmcc$36.2 Bil
DISPF
Disco CorpBvqp$36.2 Bil
TER
Teradyne IncZxgx$16.2 Bil

Sponsor Center