KLA CORP (KLAC) Stock Fundamental Analysis
NASDAQ:KLAC - Nasdaq - US4824801009 - Common Stock - Currency: USD
KLAC gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 109 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 showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! These ratings would make KLAC suitable for growth investing!
1. Profitability
1.1 Basic Checks
KLAC had positive earnings in the past year.
In the past year KLAC had a positive cash flow from operations.
KLAC had positive earnings in each of the past 5 years.
Each year in the past 5 years KLAC had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 21.39%, KLAC belongs to the best of the industry, outperforming 94.50% of the companies in the same industry.
Looking at the Return On Equity, with a value of 89.51%, KLAC belongs to the top of the industry, outperforming 98.17% of the companies in the same industry.
The Return On Invested Capital of KLAC (35.07%) is better than 98.17% 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 11.14%.
The last Return On Invested Capital (35.07%) for KLAC is above the 3 year average (33.80%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.39% | ||
| ROE | 89.51% | ||
| ROIC | 35.07% |
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
Looking at the Profit Margin, with a value of 29.58%, KLAC belongs to the top of the industry, outperforming 90.83% of the companies in the same industry.
KLAC's Profit Margin has improved in the last couple of years.
The Operating Margin of KLAC (39.92%) is better than 97.25% of its industry peers.
In the last couple of years the Operating Margin of KLAC has grown nicely.
KLAC has a Gross Margin of 61.37%. This is amongst the best in the industry. KLAC outperforms 88.07% 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 | 39.92% | ||
| PM (TTM) | 29.58% | ||
| GM | 61.37% |
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), KLAC is creating value.
KLAC has less shares outstanding than it did 1 year ago.
KLAC has less shares outstanding than it did 5 years ago.
The debt/assets ratio for KLAC is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 6.68 indicates that KLAC is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 6.68, KLAC is in the better half of the industry, outperforming 73.39% of the companies in the same industry.
The Debt to FCF ratio of KLAC is 1.75, which is an excellent value as it means it would take KLAC, only 1.75 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 1.75, KLAC is doing good in the industry, outperforming 72.48% of the companies in the same industry.
A Debt/Equity ratio of 1.64 is on the high side and indicates that KLAC has dependencies on debt financing.
KLAC has a Debt to Equity ratio of 1.64. This is amonst the worse of the industry: KLAC underperforms 91.74% of its industry peers.
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 | 1.64 | ||
| Debt/FCF | 1.75 | ||
| Altman-Z | 6.68 |
ROIC/WACC3.21
WACC10.92%
2.3 Liquidity
A Current Ratio of 2.36 indicates that KLAC has no problem at all paying its short term obligations.
With a Current ratio value of 2.36, KLAC is not doing good in the industry: 64.22% of the companies in the same industry are doing better.
A Quick Ratio of 1.63 indicates that KLAC should not have too much problems paying its short term obligations.
The Quick ratio of KLAC (1.63) is worse than 66.97% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.36 | ||
| Quick Ratio | 1.63 |
3. Growth
3.1 Past
KLAC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 20.18%, which is quite impressive.
KLAC shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 22.88% yearly.
KLAC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.15%.
The Revenue has been growing by 16.52% on average over the past years. This is quite good.
EPS 1Y (TTM)20.18%
EPS 3Y17.76%
EPS 5Y22.88%
EPS Q2Q%33.12%
Revenue 1Y (TTM)12.15%
Revenue growth 3Y12.35%
Revenue growth 5Y16.52%
Sales Q2Q%23.73%
3.2 Future
The Earnings Per Share is expected to grow by 14.06% on average over the next years. This is quite good.
The Revenue is expected to grow by 9.66% on average over the next years. This is quite good.
EPS Next Y35.8%
EPS Next 2Y18.4%
EPS Next 3Y17.09%
EPS Next 5Y14.06%
Revenue Next Year21.98%
Revenue Next 2Y12.53%
Revenue Next 3Y11.52%
Revenue Next 5Y9.66%
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
KLAC is valuated rather expensively with a Price/Earnings ratio of 23.16.
Compared to the rest of the industry, the Price/Earnings ratio of KLAC indicates a somewhat cheap valuation: KLAC is cheaper than 64.22% of the companies listed in the same industry.
KLAC is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
KLAC is valuated rather expensively with a Price/Forward Earnings ratio of 19.05.
67.89% 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 21.08. KLAC is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.16 | ||
| Fwd PE | 19.05 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, KLAC is valued a bit cheaper than the industry average as 65.14% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, KLAC is valued a bit cheaper than 73.39% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.08 | ||
| EV/EBITDA | 17.86 |
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.
A more expensive valuation may be justified as KLAC's earnings are expected to grow with 17.09% in the coming years.
PEG (NY)0.65
PEG (5Y)1.01
EPS Next 2Y18.4%
EPS Next 3Y17.09%
5. Dividend
5.1 Amount
KLAC has a Yearly Dividend Yield of 1.04%.
KLAC's Dividend Yield is a higher than the industry average which is at 3.10.
Compared to an average S&P500 Dividend Yield of 2.57, KLAC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.04% |
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 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 Years15
Div Non Decr Years19
5.3 Sustainability
25.54% of the earnings are spent on dividend by KLAC. This is a low number and 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.
DP25.54%
EPS Next 2Y18.4%
EPS Next 3Y17.09%
634.43
-7.76 (-1.21%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners90.97%
Inst Owner Change0%
Ins Owners0.1%
Ins Owner Change-4.11%
Market Cap84.31B
Analysts78.13
Price Target841.38 (32.62%)
Short Float %2.53%
Short Ratio2.97
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.04% |
Yearly Dividend5.7
Dividend Growth(5Y)13.33%
DP25.54%
Div Incr Years15
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.83%
Min EPS beat(2)1.95%
Max EPS beat(2)3.72%
EPS beat(4)4
Avg EPS beat(4)3.45%
Min EPS beat(4)1.95%
Max EPS beat(4)5.27%
EPS beat(8)8
Avg EPS beat(8)3.77%
EPS beat(12)12
Avg EPS beat(12)4.28%
EPS beat(16)16
Avg EPS beat(16)4.12%
Revenue beat(2)2
Avg Revenue beat(2)1.84%
Min Revenue beat(2)1.01%
Max Revenue beat(2)2.66%
Revenue beat(4)3
Avg Revenue beat(4)0.93%
Min Revenue beat(4)-0.05%
Max Revenue beat(4)2.66%
Revenue beat(8)5
Avg Revenue beat(8)0.62%
Revenue beat(12)9
Avg Revenue beat(12)1.15%
Revenue beat(16)11
Avg Revenue beat(16)0.9%
PT rev (1m)0.15%
PT rev (3m)4.15%
EPS NQ rev (1m)0%
EPS NQ rev (3m)4.86%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)3.71%
Revenue NQ rev (1m)-0.03%
Revenue NQ rev (3m)2.1%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)2.48%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.16 | ||
| Fwd PE | 19.05 | ||
| P/S | 7.77 | ||
| P/FCF | 25.08 | ||
| P/OCF | 23.12 | ||
| P/B | 23.52 | ||
| P/tB | 67.41 | ||
| EV/EBITDA | 17.86 |
EPS(TTM)27.39
EY4.32%
EPS(NY)33.31
Fwd EY5.25%
FCF(TTM)25.3
FCFY3.99%
OCF(TTM)27.45
OCFY4.33%
SpS81.62
BVpS26.97
TBVpS9.41
PEG (NY)0.65
PEG (5Y)1.01
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.39% | ||
| ROE | 89.51% | ||
| ROCE | 39.86% | ||
| ROIC | 35.07% | ||
| ROICexc | 53.79% | ||
| ROICexgc | 80.22% | ||
| OM | 39.92% | ||
| PM (TTM) | 29.58% | ||
| GM | 61.37% | ||
| FCFM | 31% |
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-Score7
Asset Turnover0.72
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.64 | ||
| Debt/FCF | 1.75 | ||
| Debt/EBITDA | 1.24 | ||
| Cap/Depr | 71.31% | ||
| Cap/Sales | 2.63% | ||
| Interest Coverage | 14.69 | ||
| Cash Conversion | 77.11% | ||
| Profit Quality | 104.79% | ||
| Current Ratio | 2.36 | ||
| Quick Ratio | 1.63 | ||
| Altman-Z | 6.68 |
F-Score7
WACC10.92%
ROIC/WACC3.21
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)20.18%
EPS 3Y17.76%
EPS 5Y22.88%
EPS Q2Q%33.12%
EPS Next Y35.8%
EPS Next 2Y18.4%
EPS Next 3Y17.09%
EPS Next 5Y14.06%
Revenue 1Y (TTM)12.15%
Revenue growth 3Y12.35%
Revenue growth 5Y16.52%
Sales Q2Q%23.73%
Revenue Next Year21.98%
Revenue Next 2Y12.53%
Revenue Next 3Y11.52%
Revenue Next 5Y9.66%
EBIT growth 1Y16.26%
EBIT growth 3Y15.38%
EBIT growth 5Y22.46%
EBIT Next Year41.58%
EBIT Next 3Y17.89%
EBIT Next 5Y12.88%
FCF growth 1Y12.58%
FCF growth 3Y15.77%
FCF growth 5Y24.29%
OCF growth 1Y9.27%
OCF growth 3Y14.83%
OCF growth 5Y23.48%