KLA CORP (NASDAQ:KLAC) – A Strong Growth Stock with Reasonable Valuation

KLA CORP (NASDAQ:KLAC) stands out as an affordable growth candidate based on its fundamentals. The company, a key player in semiconductor process control and yield management, demonstrates strong growth potential while maintaining reasonable valuation metrics.

Growth Prospects

• Revenue and Earnings Growth: KLAC has delivered impressive growth, with revenue increasing by 20.33% over the past year and earnings per share (EPS) rising by 35.37%. Over the last five years, EPS growth has averaged 22.88% annually.
• Future Expectations: Analysts project continued growth, with EPS expected to expand by 14.06% and revenue by 9.66% annually in the coming years.

Valuation

• P/E Ratio: At 26.36, KLAC’s P/E ratio is below the industry average of 48.51, suggesting a more attractive valuation relative to peers.
• PEG Ratio: The low PEG ratio indicates that the stock’s price accounts for its expected earnings growth, making it reasonably priced for investors seeking growth opportunities.

Profitability and Financial Health

• High Profit Margins: KLAC boasts a profit margin of 31.99%, outperforming 92.73% of its industry peers. Its operating margin of 41.73% is also well above average.
• Strong Returns: The company’s return on invested capital (ROIC) of 37.60% highlights efficient capital use.
• Debt Considerations: While KLAC carries a higher debt-to-equity ratio (1.47), its strong free cash flow coverage mitigates concerns, with debt repayable in just 1.68 years based on current cash flows.

For a deeper look at KLAC’s fundamentals, review the full fundamental analysis report.

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Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.