KLA CORP (KLAC) Stock Fundamental Analysis
NASDAQ:KLAC - Nasdaq - US4824801009 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to KLAC. KLAC was compared to 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 has a correct valuation and a medium growth rate.
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.
In the past 5 years KLAC has always been profitable.
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.
The Return On Equity of KLAC (89.51%) is better than 98.17% of its industry peers.
Looking at the Return On Invested Capital, with a value of 35.07%, KLAC belongs to the top of the industry, outperforming 98.17% of the companies in the same industry.
KLAC had an Average Return On Invested Capital over the past 3 years of 33.80%. This is significantly above the industry average of 11.32%.
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
KLAC has a Profit Margin of 29.58%. This is amongst the best in the industry. KLAC outperforms 90.83% of its industry peers.
KLAC's Profit Margin has improved in the last couple of years.
KLAC has a Operating Margin of 39.92%. This is amongst the best in the industry. KLAC outperforms 97.25% of its industry peers.
In the last couple of years the Operating Margin of KLAC has grown nicely.
With an excellent Gross Margin value of 61.37%, KLAC belongs to the best of the industry, outperforming 88.99% 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 | 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so 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.
KLAC has a worse debt/assets ratio than last year.
2.2 Solvency
KLAC has an Altman-Z score of 6.97. This indicates that KLAC is financially healthy and has little risk of bankruptcy at the moment.
KLAC has a Altman-Z score of 6.97. This is in the better half of the industry: KLAC outperforms 72.48% of its industry peers.
KLAC has a debt to FCF ratio of 1.75. This is a very positive value and a sign of high solvency as it would only need 1.75 years to pay back of all of its debts.
KLAC's Debt to FCF ratio of 1.75 is fine compared to the rest of the industry. KLAC outperforms 70.64% of its industry peers.
KLAC has a Debt/Equity ratio of 1.64. This is a high value indicating a heavy dependency on external financing.
KLAC has a Debt to Equity ratio of 1.64. This is amonst the worse of the industry: KLAC underperforms 90.83% 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 | 1.64 | ||
| Debt/FCF | 1.75 | ||
| Altman-Z | 6.97 |
ROIC/WACC3.73
WACC9.39%
2.3 Liquidity
KLAC has a Current Ratio of 2.36. This indicates that KLAC is financially healthy and has no problem in meeting its short term obligations.
KLAC's Current ratio of 2.36 is on the low side compared to the rest of the industry. KLAC is outperformed by 66.06% of its industry peers.
KLAC has a Quick Ratio of 1.63. This is a normal value and indicates that KLAC is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.63, KLAC is doing worse than 68.81% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.36 | ||
| Quick Ratio | 1.63 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 35.37% over the past year.
The Earnings Per Share has been growing by 22.88% on average over the past years. This is a very strong growth
KLAC shows a decrease in Revenue. In the last year, the revenue decreased by -6.51%.
KLAC shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 16.52% yearly.
EPS 1Y (TTM)35.37%
EPS 3Y17.76%
EPS 5Y22.88%
EPS Q2Q%59.89%
Revenue 1Y (TTM)-6.51%
Revenue growth 3Y12.35%
Revenue growth 5Y16.52%
Sales Q2Q%29.8%
3.2 Future
The Earnings Per Share is expected to grow by 14.06% on average over the next years. This is quite good.
KLAC is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.66% yearly.
EPS Next Y35.86%
EPS Next 2Y17.96%
EPS Next 3Y16.52%
EPS Next 5Y14.06%
Revenue Next Year21.96%
Revenue Next 2Y12.14%
Revenue Next 3Y10.96%
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
The Price/Earnings ratio is 22.86, which indicates a rather expensive current valuation of KLAC.
Compared to the rest of the industry, the Price/Earnings ratio of KLAC indicates a somewhat cheap valuation: KLAC is cheaper than 69.72% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.22, KLAC is valued at the same level.
A Price/Forward Earnings ratio of 21.12 indicates a rather expensive valuation of KLAC.
Based on the Price/Forward Earnings ratio, KLAC is valued a bit cheaper than the industry average as 66.06% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 20.86. KLAC is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.86 | ||
| Fwd PE | 21.12 |
4.2 Price Multiples
KLAC's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. KLAC is cheaper than 66.06% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, KLAC is valued a bit cheaper than 75.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.6 | ||
| EV/EBITDA | 19.04 |
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.
A more expensive valuation may be justified as KLAC's earnings are expected to grow with 16.52% in the coming years.
PEG (NY)0.64
PEG (5Y)1
EPS Next 2Y17.96%
EPS Next 3Y16.52%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.01%, KLAC has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.76, KLAC pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.44, KLAC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.01% |
5.2 History
The dividend of KLAC is nicely growing with an annual growth rate of 13.33%!
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)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 2Y17.96%
EPS Next 3Y16.52%
698.16
+21.85 (+3.23%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners90.97%
Inst Owner Change1.21%
Ins Owners0.1%
Ins Owner Change-4.11%
Market Cap92.78B
Analysts79.35
Price Target812.63 (16.4%)
Short Float %2.28%
Short Ratio2.43
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.01% |
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)-3.27%
PT rev (3m)0.59%
EPS NQ rev (1m)0.02%
EPS NQ rev (3m)4.86%
EPS NY rev (1m)0.04%
EPS NY rev (3m)3.76%
Revenue NQ rev (1m)-0.03%
Revenue NQ rev (3m)2.1%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)2.78%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.86 | ||
| Fwd PE | 21.12 | ||
| P/S | 8.55 | ||
| P/FCF | 27.6 | ||
| P/OCF | 25.44 | ||
| P/B | 25.88 | ||
| P/tB | 74.19 | ||
| EV/EBITDA | 19.04 |
EPS(TTM)30.54
EY4.37%
EPS(NY)33.06
Fwd EY4.74%
FCF(TTM)25.3
FCFY3.62%
OCF(TTM)27.45
OCFY3.93%
SpS81.62
BVpS26.97
TBVpS9.41
PEG (NY)0.64
PEG (5Y)1
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 | 6.97 |
F-Score7
WACC9.39%
ROIC/WACC3.73
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 Y35.86%
EPS Next 2Y17.96%
EPS Next 3Y16.52%
EPS Next 5Y14.06%
Revenue 1Y (TTM)-6.51%
Revenue growth 3Y12.35%
Revenue growth 5Y16.52%
Sales Q2Q%29.8%
Revenue Next Year21.96%
Revenue Next 2Y12.14%
Revenue Next 3Y10.96%
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%