KLA CORP (KLAC) Stock Fundamental Analysis
NASDAQ:KLAC - Nasdaq - US4824801009 - Common Stock - Currency: USD
Taking everything into account, KLAC scores 7 out of 10 in our fundamental rating. KLAC was compared to 110 industry peers in the Semiconductors & Semiconductor Equipment industry. KLAC scores excellent on profitability, but there are some minor concerns on its financial health. KLAC is growing strongly while it is still valued neutral. This is a good combination! This makes KLAC very considerable for growth investing!
1. Profitability
1.1 Basic Checks
In the past year KLAC was profitable.
In the past year KLAC had a positive cash flow from operations.
KLAC had positive earnings in each of the past 5 years.
KLAC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 24.33%, KLAC belongs to the best of the industry, outperforming 97.27% of the companies in the same industry.
With an excellent Return On Equity value of 92.27%, KLAC belongs to the best of the industry, outperforming 99.09% of the companies in the same industry.
KLAC's Return On Invested Capital of 37.60% is amongst the best of the industry. KLAC outperforms 99.09% of its industry peers.
The Average Return On Invested Capital over the past 3 years for KLAC is significantly above the industry average of 10.58%.
The 3 year average ROIC (33.80%) for KLAC is below the current ROIC(37.60%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 24.33% | ||
| ROE | 92.27% | ||
| ROIC | 37.6% |
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
KLAC has a Profit Margin of 31.99%. This is amongst the best in the industry. KLAC outperforms 92.73% of its industry peers.
In the last couple of years the Profit Margin of KLAC has grown nicely.
Looking at the Operating Margin, with a value of 41.73%, KLAC belongs to the top of the industry, outperforming 97.27% of the companies in the same industry.
In the last couple of years the Operating Margin of KLAC has grown nicely.
KLAC has a Gross Margin of 62.13%. This is amongst the best in the industry. KLAC outperforms 88.18% 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 | 41.73% | ||
| PM (TTM) | 31.99% | ||
| GM | 62.13% |
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.
The number of shares outstanding for KLAC has been reduced compared to 1 year ago.
KLAC has less shares outstanding than it did 5 years ago.
KLAC has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 8.98 indicates that KLAC is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 8.98, KLAC is in the better half of the industry, outperforming 72.73% of the companies in the same industry.
KLAC has a debt to FCF ratio of 1.68. This is a very positive value and a sign of high solvency as it would only need 1.68 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 1.68, KLAC is doing good in the industry, outperforming 69.09% of the companies in the same industry.
KLAC has a Debt/Equity ratio of 1.47. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.47, KLAC is doing worse than 91.82% 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 | 1.47 | ||
| Debt/FCF | 1.68 | ||
| Altman-Z | 8.98 |
ROIC/WACC3.26
WACC11.52%
2.3 Liquidity
KLAC has a Current Ratio of 2.54. This indicates that KLAC is financially healthy and has no problem in meeting its short term obligations.
KLAC has a worse Current ratio (2.54) than 60.00% of its industry peers.
KLAC has a Quick Ratio of 1.74. This is a normal value and indicates that KLAC is financially healthy and should not expect problems in meeting its short term obligations.
KLAC has a Quick ratio of 1.74. This is in the lower half of the industry: KLAC underperforms 67.27% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.54 | ||
| Quick Ratio | 1.74 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 35.37% over the past year.
KLAC shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 22.88% yearly.
The Revenue has grown by 20.33% in the past year. This is a very strong growth!
Measured over the past years, KLAC shows a quite strong growth in Revenue. The Revenue has been growing by 16.52% on average per year.
EPS 1Y (TTM)35.37%
EPS 3Y17.76%
EPS 5Y22.88%
EPS Q2Q%59.89%
Revenue 1Y (TTM)20.33%
Revenue growth 3Y12.35%
Revenue growth 5Y16.52%
Sales Q2Q%29.8%
3.2 Future
Based on estimates for the next years, KLAC will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.51% on average per year.
Based on estimates for the next years, KLAC will show a quite strong growth in Revenue. The Revenue will grow by 9.87% on average per year.
EPS Next Y39.23%
EPS Next 2Y19.5%
EPS Next 3Y17.57%
EPS Next 5Y14.51%
Revenue Next Year23.38%
Revenue Next 2Y12.67%
Revenue Next 3Y11.54%
Revenue Next 5Y9.87%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of 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 30.67, the valuation of KLAC can be described as expensive.
65.45% of the companies in the same industry are more expensive than KLAC, based on the Price/Earnings ratio.
KLAC's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.19.
With a Price/Forward Earnings ratio of 27.60, KLAC can be considered very expensive at the moment.
The rest of the industry has a similar Price/Forward Earnings ratio as KLAC.
The average S&P500 Price/Forward Earnings ratio is at 35.33. KLAC is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.67 | ||
| Fwd PE | 27.6 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, KLAC is valued a bit cheaper than 64.55% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, KLAC is valued a bit cheaper than 70.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.27 | ||
| EV/EBITDA | 23.3 |
4.3 Compensation for Growth
The 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 17.57% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.78
PEG (5Y)1.34
EPS Next 2Y19.5%
EPS Next 3Y17.57%
5. Dividend
5.1 Amount
KLAC has a yearly dividend return of 0.82%, which is pretty low.
Compared to an average industry Dividend Yield of 2.17, KLAC pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.35, KLAC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.82% |
5.2 History
On average, the dividend of KLAC grows each year by 13.33%, which is quite nice.
KLAC has paid a dividend for at least 10 years, which is a reliable track record.
KLAC has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)13.33%
Div Incr Years15
Div Non Decr Years19
5.3 Sustainability
KLAC pays out 22.95% of its income as dividend. This is a sustainable payout ratio.
KLAC's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP22.95%
EPS Next 2Y19.5%
EPS Next 3Y17.57%
936.53
+14.69 (+1.59%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners90.28%
Inst Owner Change0%
Ins Owners0.07%
Ins Owner Change-7.81%
Market Cap123.85B
Analysts77.58
Price Target826.96 (-11.7%)
Short Float %2.72%
Short Ratio3.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.82% |
Yearly Dividend5.7
Dividend Growth(5Y)13.33%
DP22.95%
Div Incr Years15
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.77%
Min EPS beat(2)1.83%
Max EPS beat(2)3.72%
EPS beat(4)4
Avg EPS beat(4)3.19%
Min EPS beat(4)1.83%
Max EPS beat(4)5.27%
EPS beat(8)8
Avg EPS beat(8)3.86%
EPS beat(12)12
Avg EPS beat(12)4.08%
EPS beat(16)16
Avg EPS beat(16)3.96%
Revenue beat(2)1
Avg Revenue beat(2)1.19%
Min Revenue beat(2)-0.29%
Max Revenue beat(2)2.66%
Revenue beat(4)2
Avg Revenue beat(4)0.83%
Min Revenue beat(4)-0.29%
Max Revenue beat(4)2.66%
Revenue beat(8)4
Avg Revenue beat(8)0.53%
Revenue beat(12)8
Avg Revenue beat(12)0.98%
Revenue beat(16)10
Avg Revenue beat(16)0.82%
PT rev (1m)2.34%
PT rev (3m)-1.71%
EPS NQ rev (1m)0.07%
EPS NQ rev (3m)7.19%
EPS NY rev (1m)-0.05%
EPS NY rev (3m)2.53%
Revenue NQ rev (1m)0.13%
Revenue NQ rev (3m)2.75%
Revenue NY rev (1m)0.12%
Revenue NY rev (3m)1.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.67 | ||
| Fwd PE | 27.6 | ||
| P/S | 10.72 | ||
| P/FCF | 35.27 | ||
| P/OCF | 32.51 | ||
| P/B | 30.93 | ||
| P/tB | 71.94 | ||
| EV/EBITDA | 23.3 |
EPS(TTM)30.54
EY3.26%
EPS(NY)33.93
Fwd EY3.62%
FCF(TTM)26.55
FCFY2.84%
OCF(TTM)28.81
OCFY3.08%
SpS87.34
BVpS30.28
TBVpS13.02
PEG (NY)0.78
PEG (5Y)1.34
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 24.33% | ||
| ROE | 92.27% | ||
| ROCE | 42.74% | ||
| ROIC | 37.6% | ||
| ROICexc | 58.5% | ||
| ROICexgc | 85.39% | ||
| OM | 41.73% | ||
| PM (TTM) | 31.99% | ||
| GM | 62.13% | ||
| FCFM | 30.4% |
ROA(3y)22.78%
ROA(5y)20.34%
ROE(3y)145.04%
ROE(5y)108.46%
ROIC(3y)33.8%
ROIC(5y)29.72%
ROICexc(3y)51.15%
ROICexc(5y)43.94%
ROICexgc(3y)94.92%
ROICexgc(5y)88.94%
ROCE(3y)38.41%
ROCE(5y)33.78%
ROICexcg growth 3Y2%
ROICexcg growth 5Y5.85%
ROICexc growth 3Y11.6%
ROICexc growth 5Y19.31%
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%
F-Score9
Asset Turnover0.76
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.47 | ||
| Debt/FCF | 1.68 | ||
| Debt/EBITDA | 1.13 | ||
| Cap/Depr | 74.83% | ||
| Cap/Sales | 2.58% | ||
| Interest Coverage | 15.54 | ||
| Cash Conversion | 72.99% | ||
| Profit Quality | 95.02% | ||
| Current Ratio | 2.54 | ||
| Quick Ratio | 1.74 | ||
| Altman-Z | 8.98 |
F-Score9
WACC11.52%
ROIC/WACC3.26
Cap/Depr(3y)78.64%
Cap/Depr(5y)69.86%
Cap/Sales(3y)3.14%
Cap/Sales(5y)3.08%
Profit Quality(3y)99.49%
Profit Quality(5y)105.22%
High Growth Momentum
Growth
EPS 1Y (TTM)35.37%
EPS 3Y17.76%
EPS 5Y22.88%
EPS Q2Q%59.89%
EPS Next Y39.23%
EPS Next 2Y19.5%
EPS Next 3Y17.57%
EPS Next 5Y14.51%
Revenue 1Y (TTM)20.33%
Revenue growth 3Y12.35%
Revenue growth 5Y16.52%
Sales Q2Q%29.8%
Revenue Next Year23.38%
Revenue Next 2Y12.67%
Revenue Next 3Y11.54%
Revenue Next 5Y9.87%
EBIT growth 1Y31.44%
EBIT growth 3Y15.38%
EBIT growth 5Y22.46%
EBIT Next Year44.45%
EBIT Next 3Y17.19%
EBIT Next 5Y13.19%
FCF growth 1Y9.93%
FCF growth 3Y15.77%
FCF growth 5Y24.29%
OCF growth 1Y7.92%
OCF growth 3Y14.83%
OCF growth 5Y23.48%