KLA CORP (KLAC)
US4824801009 - Common Stock
KLAC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 107 industry peers in the Semiconductors & Semiconductor Equipment industry. While KLAC belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. KLAC has a correct valuation and a medium growth rate.
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.
In the past 5 years KLAC always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 18.95%, KLAC belongs to the top of the industry, outperforming 92.45% of the companies in the same industry.
The Return On Equity of KLAC (88.92%) is better than 99.06% of its industry peers.
Looking at the Return On Invested Capital, with a value of 30.30%, KLAC belongs to the top of the industry, outperforming 99.06% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for KLAC is significantly above the industry average of 10.84%.
The last Return On Invested Capital (30.30%) for KLAC is above the 3 year average (29.03%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.95% | ||
| ROE | 88.92% | ||
| ROIC | 30.3% |
ROA(3y)23.56%
ROA(5y)19.37%
ROE(3y)138.21%
ROE(5y)100.9%
ROIC(3y)29.03%
ROIC(5y)24.11%
1.3 Margins
Looking at the Profit Margin, with a value of 27.98%, KLAC belongs to the top of the industry, outperforming 90.57% of the companies in the same industry.
KLAC's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 38.51%, KLAC belongs to the best of the industry, outperforming 95.28% of the companies in the same industry.
In the last couple of years the Operating Margin of KLAC has remained more or less at the same level.
Looking at the Gross Margin, with a value of 61.70%, KLAC belongs to the top of the industry, outperforming 83.96% of the companies in the same industry.
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 | 38.51% | ||
| PM (TTM) | 27.98% | ||
| GM | 61.7% |
OM growth 3Y9.52%
OM growth 5Y0.86%
PM growth 3Y15.47%
PM growth 5Y10.19%
GM growth 3Y2.11%
GM growth 5Y-0.83%
2. Health
2.1 Basic Checks
KLAC has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it 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.
KLAC has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 6.84 indicates that KLAC is not in any danger for bankruptcy at the moment.
The Altman-Z score of KLAC (6.84) is better than 68.87% of its industry peers.
The Debt to FCF ratio of KLAC is 1.86, which is an excellent value as it means it would take KLAC, only 1.86 years of fcf income to pay off all of its debts.
KLAC's Debt to FCF ratio of 1.86 is fine compared to the rest of the industry. KLAC outperforms 70.75% of its industry peers.
KLAC has a Debt/Equity ratio of 1.69. This is a high value indicating a heavy dependency on external financing.
KLAC's Debt to Equity ratio of 1.69 is on the low side compared to the rest of the industry. KLAC is outperformed by 85.85% 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 | 1.69 | ||
| Debt/FCF | 1.86 | ||
| Altman-Z | 6.84 |
ROIC/WACC2.64
WACC11.5%
2.3 Liquidity
A Current Ratio of 1.91 indicates that KLAC should not have too much problems paying its short term obligations.
The Current ratio of KLAC (1.91) is worse than 72.64% of its industry peers.
A Quick Ratio of 1.25 indicates that KLAC should not have too much problems paying its short term obligations.
KLAC has a Quick ratio of 1.25. This is in the lower half of the industry: KLAC underperforms 75.47% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.91 | ||
| Quick Ratio | 1.25 |
3. Growth
3.1 Past
The earnings per share for KLAC have decreased strongly by -10.20% in the last year.
KLAC shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 25.89% yearly.
Looking at the last year, KLAC shows a decrease in Revenue. The Revenue has decreased by -7.75% in the last year.
KLAC shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 21.06% yearly.
EPS 1Y (TTM)-10.2%
EPS 3Y34.8%
EPS 5Y25.89%
EPS growth Q2Q-16.53%
Revenue 1Y (TTM)-7.75%
Revenue growth 3Y21.82%
Revenue growth 5Y21.06%
Revenue growth Q2Q-16.66%
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 10.63% yearly.
KLAC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.35% yearly.
EPS Next Y-7.96%
EPS Next 2Y5.53%
EPS Next 3Y9.06%
EPS Next 5Y10.63%
Revenue Next Year-7.2%
Revenue Next 2Y2.66%
Revenue Next 3Y5.5%
Revenue Next 5Y5.35%
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.
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
Based on the Price/Earnings ratio of 30.99, the valuation of KLAC can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of KLAC indicates a somewhat cheap valuation: KLAC is cheaper than 63.21% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 24.92, KLAC is valued a bit more expensive.
A Price/Forward Earnings ratio of 25.04 indicates a quite expensive valuation of KLAC.
71.70% of the companies in the same industry are more expensive than KLAC, based on the Price/Forward Earnings ratio.
KLAC is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.49, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.99 | ||
| Fwd PE | 25.04 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, KLAC is valued a bit cheaper than the industry average as 66.04% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, KLAC is valued a bit cheaper than the industry average as 77.36% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.15 | ||
| EV/EBITDA | 22.22 |
4.3 Compensation for Growth
KLAC has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.2
EPS Next 2Y5.53%
EPS Next 3Y9.06%
5. Dividend
5.1 Amount
KLAC has a yearly dividend return of 0.88%, which is pretty low.
Compared to an average industry Dividend Yield of 2.09, KLAC pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.88, KLAC pays less dividend than the S&P500 average, which is at 2.43.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.88% |
5.2 History
The dividend of KLAC is nicely growing with an annual growth rate of 15.00%!
KLAC has been paying a dividend for at least 10 years, so it has a reliable track record.
As KLAC did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)15%
Div Incr Years8
Div Non Decr Years8
5.3 Sustainability
KLAC pays out 27.30% of its income as dividend. This is a sustainable payout ratio.
KLAC's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP27.3%
EPS Next 2Y5.53%
EPS Next 3Y9.06%
KLA CORP
NASDAQ:KLAC (4/26/2024, 7:00:03 PM)
After market: 710.08 +3.82 (+0.54%)706.26
+33.31 (+4.95%)
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
Ins Owner Change
Market Cap95.51B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.88% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.99 | ||
| Fwd PE | 25.04 | ||
| 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)N/A
PEG (5Y)1.2
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.95% | ||
| ROE | 88.92% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 38.51% | ||
| PM (TTM) | 27.98% | ||
| GM | 61.7% | ||
| 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 Turnover0.68
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.69 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.91 | ||
| Quick Ratio | 1.25 | ||
| 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)
Growth
EPS 1Y (TTM)-10.2%
EPS 3Y34.8%
EPS 5Y
EPS growth Q2Q
EPS Next Y-7.96%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-7.75%
Revenue growth 3Y21.82%
Revenue growth 5Y
Revenue growth 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
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y