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 110 industry peers in the Semiconductors & Semiconductor Equipment industry. While KLAC has a great profitability rating, there are some minor concerns on its financial health. KLAC is not overvalued while it is showing excellent growth. This is an interesting combination. 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.
In the past 5 years KLAC has always been profitable.
KLAC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
KLAC has a better Return On Assets (24.33%) than 97.27% of its industry peers.
The Return On Equity of KLAC (92.27%) is better than 99.09% of its industry peers.
Looking at the Return On Invested Capital, with a value of 37.60%, KLAC belongs to the top of the industry, outperforming 99.09% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital 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
The Profit Margin of KLAC (31.99%) is better than 92.73% of its industry peers.
KLAC's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 41.73%, KLAC belongs to the best 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.
With an excellent Gross Margin value of 62.13%, KLAC belongs to the best of the industry, outperforming 88.18% of the companies in the same industry.
KLAC's Gross Margin has been stable in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), 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.
Compared to 1 year ago, KLAC has a worse debt to assets ratio.
2.2 Solvency
KLAC has an Altman-Z score of 9.03. This indicates that KLAC is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 9.03, KLAC is doing good in the industry, outperforming 73.64% 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.
KLAC's Debt to FCF ratio of 1.68 is fine compared to the rest of the industry. KLAC outperforms 69.09% of its industry peers.
A Debt/Equity ratio of 1.47 is on the high side and indicates that KLAC has dependencies on debt financing.
KLAC's Debt to Equity ratio of 1.47 is on the low side compared to the rest of the industry. KLAC is outperformed by 91.82% 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 | 1.47 | ||
| Debt/FCF | 1.68 | ||
| Altman-Z | 9.03 |
ROIC/WACC3.75
WACC10.04%
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's Current ratio of 2.54 is on the low side compared to the rest of the industry. KLAC is outperformed by 60.00% of its industry peers.
A Quick Ratio of 1.74 indicates that KLAC should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.74, KLAC is doing worse than 67.27% of the companies in the same industry.
| 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.
Looking at the last year, KLAC shows a very strong growth in Revenue. The Revenue has grown by 20.33%.
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
KLAC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.51% yearly.
The Revenue is expected to grow by 9.87% on average over the next years. This is quite good.
EPS Next Y39.19%
EPS Next 2Y19.31%
EPS Next 3Y17.16%
EPS Next 5Y14.51%
Revenue Next Year23.35%
Revenue Next 2Y12.57%
Revenue Next 3Y11.38%
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
A Price/Earnings ratio of 30.27 indicates a quite expensive valuation of KLAC.
65.45% 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 (27.45), we can say KLAC is valued inline with the index average.
The Price/Forward Earnings ratio is 27.34, which means the current valuation is very expensive for KLAC.
The rest of the industry has a similar Price/Forward Earnings ratio as KLAC.
KLAC is valuated rather expensively when we compare the Price/Forward Earnings ratio to 21.90, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.27 | ||
| Fwd PE | 27.34 |
4.2 Price Multiples
66.36% of the companies in the same industry are more expensive than KLAC, based on the Enterprise Value to EBITDA ratio.
KLAC's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. KLAC is cheaper than 70.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.99 | ||
| EV/EBITDA | 23.48 |
4.3 Compensation for Growth
KLAC's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of KLAC may justify a higher PE ratio.
KLAC's earnings are expected to grow with 17.16% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.77
PEG (5Y)1.32
EPS Next 2Y19.31%
EPS Next 3Y17.16%
5. Dividend
5.1 Amount
KLAC has a yearly dividend return of 0.84%, which is pretty low.
Compared to an average industry Dividend Yield of 2.28, KLAC pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.84, KLAC pays less dividend than the S&P500 average, which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.84% |
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
22.95% 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.
DP22.95%
EPS Next 2Y19.31%
EPS Next 3Y17.16%
924.58
+3.48 (+0.38%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners90.28%
Inst Owner Change0.09%
Ins Owners0.07%
Ins Owner Change-4.66%
Market Cap122.87B
Analysts78.13
Price Target826.96 (-10.56%)
Short Float %2.79%
Short Ratio3.13
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.84% |
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)2.51%
PT rev (3m)-1.39%
EPS NQ rev (1m)0%
EPS NQ rev (3m)7.25%
EPS NY rev (1m)-0.07%
EPS NY rev (3m)2.5%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.58%
Revenue NY rev (1m)0.09%
Revenue NY rev (3m)1.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.27 | ||
| Fwd PE | 27.34 | ||
| P/S | 10.64 | ||
| P/FCF | 34.99 | ||
| P/OCF | 32.25 | ||
| P/B | 30.68 | ||
| P/tB | 71.37 | ||
| EV/EBITDA | 23.48 |
EPS(TTM)30.54
EY3.3%
EPS(NY)33.82
Fwd EY3.66%
FCF(TTM)26.42
FCFY2.86%
OCF(TTM)28.67
OCFY3.1%
SpS86.92
BVpS30.14
TBVpS12.96
PEG (NY)0.77
PEG (5Y)1.32
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 | 9.03 |
F-Score9
WACC10.04%
ROIC/WACC3.75
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 Y39.19%
EPS Next 2Y19.31%
EPS Next 3Y17.16%
EPS Next 5Y14.51%
Revenue 1Y (TTM)20.33%
Revenue growth 3Y12.35%
Revenue growth 5Y16.52%
Sales Q2Q%29.8%
Revenue Next Year23.35%
Revenue Next 2Y12.57%
Revenue Next 3Y11.38%
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%