KLA CORP (KLAC)
US4824801009 - Common Stock
We assign a fundamental rating of 7 out of 10 to KLAC. KLAC was compared to 108 industry peers in the Semiconductors & Semiconductor Equipment industry. KLAC scores excellent on profitability, but there are some minor concerns on its financial health. KLAC has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
KLAC had positive earnings in the past year.
KLAC had a positive operating cash flow in the past year.
Each year in the past 5 years KLAC has been profitable.
In the past 5 years KLAC always reported a positive cash flow from operatings.
1.2 Ratios
KLAC's Return On Assets of 18.92% is amongst the best of the industry. KLAC outperforms 93.52% of its industry peers.
Looking at the Return On Equity, with a value of 83.33%, KLAC belongs to the top of the industry, outperforming 99.07% of the companies in the same industry.
KLAC has a Return On Invested Capital of 32.68%. This is amongst the best in the industry. KLAC outperforms 99.07% of its industry peers.
KLAC had an Average Return On Invested Capital over the past 3 years of 33.80%. This is significantly above the industry average of 11.05%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.92% | ||
| ROE | 83.33% | ||
| ROIC | 32.68% |
ROA(3y)22.78%
ROA(5y)20.34%
ROE(3y)145.04%
ROE(5y)108.46%
ROIC(3y)33.8%
ROIC(5y)29.72%
1.3 Margins
With an excellent Profit Margin value of 28.92%, KLAC belongs to the best of the industry, outperforming 89.81% of the companies in the same industry.
KLAC's Profit Margin has improved in the last couple of years.
KLAC has a better Operating Margin (39.41%) than 97.22% of its industry peers.
KLAC's Operating Margin has improved in the last couple of years.
KLAC has a better Gross Margin (61.56%) than 86.11% of its industry peers.
In the last couple of years the Gross Margin of KLAC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 39.41% | ||
| PM (TTM) | 28.92% | ||
| GM | 61.56% |
OM growth 3Y2.69%
OM growth 5Y5.1%
PM growth 3Y-2.14%
PM growth 5Y1.81%
GM growth 3Y1.07%
GM growth 5Y0.93%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so KLAC is creating value.
Compared to 1 year ago, KLAC has less shares outstanding
The number of shares outstanding for KLAC has been reduced compared to 5 years ago.
KLAC has a worse debt/assets ratio than last year.
2.2 Solvency
KLAC has an Altman-Z score of 6.12. This indicates that KLAC is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 6.12, KLAC is doing good in the industry, outperforming 69.44% of the companies in the same industry.
KLAC has a debt to FCF ratio of 2.10. This is a good value and a sign of high solvency as KLAC would need 2.10 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.10, KLAC is in the better half of the industry, outperforming 73.15% of the companies in the same industry.
A Debt/Equity ratio of 1.65 is on the high side and indicates that KLAC has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.65, KLAC is doing worse than 88.89% of the companies in the same industry.
Even though the debt/equity ratio score it not favorable for KLAC, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.65 | ||
| Debt/FCF | 2.1 | ||
| Altman-Z | 6.12 |
ROIC/WACC2.23
WACC14.64%
2.3 Liquidity
KLAC has a Current Ratio of 2.13. This indicates that KLAC is financially healthy and has no problem in meeting its short term obligations.
KLAC has a Current ratio of 2.13. This is in the lower half of the industry: KLAC underperforms 71.30% of its industry peers.
A Quick Ratio of 1.48 indicates that KLAC should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.48, KLAC is not doing good in the industry: 67.59% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.13 | ||
| Quick Ratio | 1.48 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.58% over the past year.
The Earnings Per Share has been growing by 22.88% on average over the past years. This is a very strong growth
The Revenue has been growing slightly by 0.87% in the past year.
The Revenue has been growing by 16.52% on average over the past years. This is quite good.
EPS 1Y (TTM)5.58%
EPS 3Y17.76%
EPS 5Y22.88%
EPS Q2Q%27.7%
Revenue 1Y (TTM)0.87%
Revenue growth 3Y12.35%
Revenue growth 5Y16.52%
Sales Q2Q%18.55%
3.2 Future
The Earnings Per Share is expected to grow by 15.58% on average over the next years. This is quite good.
KLAC is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.41% yearly.
EPS Next Y31.67%
EPS Next 2Y18.25%
EPS Next 3Y16.7%
EPS Next 5Y15.58%
Revenue Next Year19.83%
Revenue Next 2Y12.35%
Revenue Next 3Y11.24%
Revenue Next 5Y8.41%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 24.98, the valuation of KLAC can be described as rather expensive.
Based on the Price/Earnings ratio, KLAC is valued a bit cheaper than the industry average as 74.07% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 28.96. KLAC is around the same levels.
Based on the Price/Forward Earnings ratio of 19.06, the valuation of KLAC can be described as rather expensive.
75.00% of the companies in the same industry are more expensive than KLAC, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 23.82. KLAC is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.98 | ||
| Fwd PE | 19.06 |
4.2 Price Multiples
71.30% of the companies in the same industry are more expensive than KLAC, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of KLAC indicates a somewhat cheap valuation: KLAC is cheaper than 79.63% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.88 | ||
| EV/EBITDA | 18.45 |
4.3 Compensation for Growth
KLAC's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
KLAC has an outstanding profitability rating, which may justify a higher PE ratio.
KLAC's earnings are expected to grow with 16.70% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.79
PEG (5Y)1.09
EPS Next 2Y18.25%
EPS Next 3Y16.7%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.05%, KLAC has a reasonable but not impressive dividend return.
In the last 3 months the price of KLAC has falen by -22.58%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 2.37, KLAC pays a bit more dividend than its industry peers.
With a Dividend Yield of 1.05, KLAC pays less dividend than the S&P500 average, which is at 2.23.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.05% |
5.2 History
On average, the dividend of KLAC grows each year by 13.33%, which is quite nice.
KLAC has been paying a dividend for at least 10 years, so it has a reliable track record.
KLAC has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)13.33%
Div Incr Years14
Div Non Decr Years18
5.3 Sustainability
KLAC pays out 26.62% of its income as dividend. This is a sustainable payout ratio.
The dividend of KLAC is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP26.62%
EPS Next 2Y18.25%
EPS Next 3Y16.7%
KLA CORP
NASDAQ:KLAC (11/21/2024, 8:00:02 PM)
After market: 633.16 0 (0%)633.16
+16.33 (+2.65%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
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Market Cap84.69B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.05% |
Dividend Growth(5Y)
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Surprises & Revisions
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Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.98 | ||
| Fwd PE | 19.06 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.79
PEG (5Y)1.09
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.92% | ||
| ROE | 83.33% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 39.41% | ||
| PM (TTM) | 28.92% | ||
| GM | 61.56% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.65
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.65 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.13 | ||
| Quick Ratio | 1.48 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)5.58%
EPS 3Y17.76%
EPS 5Y
EPS Q2Q%
EPS Next Y31.67%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)0.87%
Revenue growth 3Y12.35%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
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FCF growth 5Y
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