1627.2 USD
+10.87 (+0.67%)
1667 USD
+39.8 (+2.45%)
Taking everything into account, KLAC scores 7 out of 10 in our fundamental rating. KLAC was compared to 113 industry peers in the Semiconductors & Semiconductor Equipment industry. KLAC gets an excellent profitability rating and is at the same time showing great financial health properties. KLAC is not overvalued while it is showing excellent growth. This is an interesting combination. This makes KLAC very considerable for growth and quality investing!
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.
- 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
- KLAC has a Return On Assets of 25.96%. This is amongst the best in the industry. KLAC outperforms 97.35% of its industry peers.
- KLAC has a better Return On Equity (84.99%) than 99.11% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 38.07%, KLAC belongs to the top of the industry, outperforming 99.11% of the companies in the same industry.
- KLAC had an Average Return On Invested Capital over the past 3 years of 34.16%. This is significantly above the industry average of 10.78%.
- The last Return On Invested Capital (38.07%) for KLAC is above the 3 year average (34.16%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 25.96% | ||
| ROE | 84.99% | ||
| ROIC | 38.07% |
ROA(3y)22.41%
ROA(5y)22.77%
ROE(3y)94.85%
ROE(5y)116.64%
ROIC(3y)34.16%
ROIC(5y)32.64%
1.3 Margins
- KLAC has a better Profit Margin (33.83%) than 92.92% of its industry peers.
- KLAC's Profit Margin has improved in the last couple of years.
- Looking at the Operating Margin, with a value of 42.86%, KLAC belongs to the top of the industry, outperforming 97.35% of the companies in the same industry.
- KLAC's Operating Margin has improved in the last couple of years.
- KLAC's Gross Margin of 61.99% is amongst the best of the industry. KLAC outperforms 86.73% 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 | 42.86% | ||
| PM (TTM) | 33.83% | ||
| GM | 61.99% |
OM growth 3Y-0.21%
OM growth 5Y6.37%
PM growth 3Y-2.51%
PM growth 5Y9.77%
GM growth 3Y-1.04%
GM growth 5Y1.05%
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.
- The debt/assets ratio for KLAC has been reduced compared to a year ago.
2.2 Solvency
- An Altman-Z score of 13.89 indicates that KLAC is not in any danger for bankruptcy at the moment.
- The Altman-Z score of KLAC (13.89) is better than 76.99% of its industry peers.
- The Debt to FCF ratio of KLAC is 1.52, which is an excellent value as it means it would take KLAC, only 1.52 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of KLAC (1.52) is better than 70.80% of its industry peers.
- KLAC has a Debt/Equity ratio of 1.18. This is a high value indicating a heavy dependency on external financing.
- The Debt to Equity ratio of KLAC (1.18) is worse than 88.50% of its industry peers.
- Although KLAC does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.18 | ||
| Debt/FCF | 1.52 | ||
| Altman-Z | 13.89 |
ROIC/WACC3.49
WACC10.9%
2.3 Liquidity
- KLAC has a Current Ratio of 2.69. This indicates that KLAC is financially healthy and has no problem in meeting its short term obligations.
- KLAC's Current ratio of 2.69 is in line compared to the rest of the industry. KLAC outperforms 47.79% of its industry peers.
- KLAC has a Quick Ratio of 1.88. This is a normal value and indicates that KLAC is financially healthy and should not expect problems in meeting its short term obligations.
- The Quick ratio of KLAC (1.88) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.69 | ||
| Quick Ratio | 1.88 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 37.28% over the past year.
- The Earnings Per Share has been growing by 26.37% on average over the past years. This is a very strong growth
- Looking at the last year, KLAC shows a very strong growth in Revenue. The Revenue has grown by 22.11%.
- Measured over the past years, KLAC shows a quite strong growth in Revenue. The Revenue has been growing by 15.93% on average per year.
EPS 1Y (TTM)37.28%
EPS 3Y16.32%
EPS 5Y26.37%
EPS Q2Q%20.19%
Revenue 1Y (TTM)22.11%
Revenue growth 3Y9.69%
Revenue growth 5Y15.93%
Sales Q2Q%12.96%
3.2 Future
- KLAC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.51% yearly.
- Based on estimates for the next years, KLAC will show a quite strong growth in Revenue. The Revenue will grow by 8.56% on average per year.
EPS Next Y9.93%
EPS Next 2Y15.16%
EPS Next 3Y12.62%
EPS Next 5Y12.51%
Revenue Next Year8.74%
Revenue Next 2Y11.76%
Revenue Next 3Y10.53%
Revenue Next 5Y8.56%
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.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 46.76, which means the current valuation is very expensive for KLAC.
- 69.03% of the companies in the same industry are more expensive than KLAC, based on the Price/Earnings ratio.
- When comparing the Price/Earnings ratio of KLAC to the average of the S&P500 Index (28.60), we can say KLAC is valued expensively.
- KLAC is valuated quite expensively with a Price/Forward Earnings ratio of 36.83.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of KLAC is on the same level as its industry peers.
- The average S&P500 Price/Forward Earnings ratio is at 25.83. KLAC is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 46.76 | ||
| Fwd PE | 36.83 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, KLAC is valued a bit cheaper than the industry average as 64.60% of the companies are valued more expensively.
- 69.91% of the companies in the same industry are more expensive than KLAC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 55.21 | ||
| EV/EBITDA | 36.83 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates KLAC does not grow enough to justify the current Price/Earnings ratio.
- 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 12.62% in the coming years.
PEG (NY)4.71
PEG (5Y)1.77
EPS Next 2Y15.16%
EPS Next 3Y12.62%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.51%, KLAC is not a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 0.49, KLAC pays a bit more dividend than its industry peers.
- With a Dividend Yield of 0.51, KLAC pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.51% |
5.2 History
- On average, the dividend of KLAC grows each year by 15.33%, 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)15.33%
Div Incr Years15
Div Non Decr Years19
5.3 Sustainability
- 22.67% of the earnings are spent on dividend by KLAC. This is a low number and sustainable payout ratio.
- The dividend of KLAC is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP22.67%
EPS Next 2Y15.16%
EPS Next 3Y12.62%
KLA CORP / KLAC FAQ
What is the ChartMill fundamental rating of KLA CORP (KLAC) stock?
ChartMill assigns a fundamental rating of 7 / 10 to KLAC.
Can you provide the valuation status for KLA CORP?
ChartMill assigns a valuation rating of 4 / 10 to KLA CORP (KLAC). This can be considered as Fairly Valued.
Can you provide the profitability details for KLA CORP?
KLA CORP (KLAC) has a profitability rating of 9 / 10.
What is the financial health of KLA CORP (KLAC) stock?
The financial health rating of KLA CORP (KLAC) is 7 / 10.
Can you provide the expected EPS growth for KLAC stock?
The Earnings per Share (EPS) of KLA CORP (KLAC) is expected to grow by 9.93% in the next year.