KLA CORP (KLAC) Stock Fundamental Analysis
NASDAQ:KLAC - Nasdaq - US4824801009 - Common Stock - Currency: USD
Overall KLAC gets a fundamental rating of 7 out of 10. We evaluated KLAC against 110 industry peers in the Semiconductors & Semiconductor Equipment industry. KLAC has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. KLAC is not valued too expensively and it also shows a decent growth rate. These ratings could make KLAC a good candidate for quality 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.
KLAC had positive earnings in each of the past 5 years.
KLAC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
KLAC has a Return On Assets of 25.28%. This is amongst the best in the industry. KLAC outperforms 97.27% of its industry peers.
With an excellent Return On Equity value of 86.56%, KLAC belongs to the best of the industry, outperforming 97.27% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 37.75%, KLAC belongs to the top of the industry, outperforming 99.09% 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 10.87%.
The last Return On Invested Capital (37.75%) for KLAC is above the 3 year average (34.71%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 25.28% | ||
| ROE | 86.56% | ||
| ROIC | 37.75% |
ROA(3y)22.41%
ROA(5y)22.77%
ROE(3y)94.85%
ROE(5y)116.64%
ROIC(3y)34.71%
ROIC(5y)32.97%
1.3 Margins
KLAC has a better Profit Margin (33.41%) than 93.64% of its industry peers.
KLAC's Profit Margin has improved in the last couple of years.
KLAC's Operating Margin of 42.77% is amongst the best of the industry. KLAC outperforms 97.27% of its industry peers.
In the last couple of years the Operating Margin of KLAC has grown nicely.
Looking at the Gross Margin, with a value of 62.33%, KLAC belongs to the top of the industry, outperforming 87.27% of the companies in the same industry.
KLAC's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 42.77% | ||
| PM (TTM) | 33.41% | ||
| GM | 62.33% |
OM growth 3Y1.27%
OM growth 5Y7.31%
PM growth 3Y-2.51%
PM growth 5Y9.77%
GM growth 3Y-0.28%
GM growth 5Y1.51%
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.
The number of shares outstanding for KLAC has been reduced compared to 1 year ago.
Compared to 5 years ago, KLAC has less shares outstanding
Compared to 1 year ago, KLAC has an improved debt to assets ratio.
2.2 Solvency
KLAC has an Altman-Z score of 9.13. This indicates that KLAC is financially healthy and has little risk of bankruptcy at the moment.
KLAC's Altman-Z score of 9.13 is fine compared to the rest of the industry. KLAC outperforms 74.55% of its industry peers.
The Debt to FCF ratio of KLAC is 1.57, which is an excellent value as it means it would take KLAC, only 1.57 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 1.57, KLAC is doing good in the industry, outperforming 70.91% of the companies in the same industry.
A Debt/Equity ratio of 1.25 is on the high side and indicates that KLAC has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.25, KLAC is doing worse than 90.91% of the companies in the same industry.
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 | 1.25 | ||
| Debt/FCF | 1.57 | ||
| Altman-Z | 9.13 |
ROIC/WACC3.32
WACC11.37%
2.3 Liquidity
A Current Ratio of 2.62 indicates that KLAC has no problem at all paying its short term obligations.
With a Current ratio value of 2.62, KLAC perfoms like the industry average, outperforming 44.55% of the companies in the same industry.
KLAC has a Quick Ratio of 1.83. This is a normal value and indicates that KLAC is financially healthy and should not expect problems in meeting its short term obligations.
KLAC has a Quick ratio (1.83) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.62 | ||
| Quick Ratio | 1.83 |
3. Growth
3.1 Past
KLAC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 40.24%, which is quite impressive.
The Earnings Per Share has been growing by 26.37% on average over the past years. This is a very strong growth
KLAC shows a strong growth in Revenue. In the last year, the Revenue has grown by 23.89%.
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)40.24%
EPS 3Y16.32%
EPS 5Y26.37%
EPS Q2Q%42.12%
Revenue 1Y (TTM)23.89%
Revenue growth 3Y9.69%
Revenue growth 5Y15.93%
Sales Q2Q%23.59%
3.2 Future
Based on estimates for the next years, KLAC will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.86% on average per year.
Based on estimates for the next years, KLAC will show a small growth in Revenue. The Revenue will grow by 6.73% on average per year.
EPS Next Y1.83%
EPS Next 2Y7.65%
EPS Next 3Y7.2%
EPS Next 5Y8.86%
Revenue Next Year2.9%
Revenue Next 2Y6.14%
Revenue Next 3Y5.65%
Revenue Next 5Y6.73%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last 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 28.67, which means the current valuation is very expensive for KLAC.
Based on the Price/Earnings ratio, KLAC is valued a bit cheaper than 66.36% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.11. KLAC is around the same levels.
The Price/Forward Earnings ratio is 28.16, which means the current valuation is very expensive for KLAC.
Compared to the rest of the industry, the Price/Forward Earnings ratio of KLAC is on the same level as its industry peers.
KLAC is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 35.78, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.67 | ||
| Fwd PE | 28.16 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, KLAC is valued a bit cheaper than the industry average as 66.36% of the companies are valued more expensively.
71.82% 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 | 33.77 | ||
| EV/EBITDA | 22.27 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
KLAC has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)15.66
PEG (5Y)1.09
EPS Next 2Y7.65%
EPS Next 3Y7.2%
5. Dividend
5.1 Amount
With a yearly dividend of 0.83%, KLAC is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.47, KLAC pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.83, KLAC pays less dividend than the S&P500 average, which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.83% |
5.2 History
The dividend of KLAC is nicely growing with an annual growth rate of 15.31%!
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)15.31%
Div Incr Years15
Div Non Decr Years19
5.3 Sustainability
KLAC pays out 22.27% 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.
DP22.27%
EPS Next 2Y7.65%
EPS Next 3Y7.2%
955.41
+5.93 (+0.62%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners91.01%
Inst Owner Change-1.2%
Ins Owners0.07%
Ins Owner Change5.8%
Market Cap126.34B
Analysts76.47
Price Target930.5 (-2.61%)
Short Float %2.37%
Short Ratio2.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.83% |
Yearly Dividend6.78
Dividend Growth(5Y)15.31%
DP22.27%
Div Incr Years15
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.63%
Min EPS beat(2)1.83%
Max EPS beat(2)7.44%
EPS beat(4)4
Avg EPS beat(4)3.73%
Min EPS beat(4)1.83%
Max EPS beat(4)7.44%
EPS beat(8)8
Avg EPS beat(8)3.66%
EPS beat(12)12
Avg EPS beat(12)4.41%
EPS beat(16)16
Avg EPS beat(16)3.87%
Revenue beat(2)1
Avg Revenue beat(2)0.34%
Min Revenue beat(2)-0.29%
Max Revenue beat(2)0.98%
Revenue beat(4)3
Avg Revenue beat(4)1.09%
Min Revenue beat(4)-0.29%
Max Revenue beat(4)2.66%
Revenue beat(8)4
Avg Revenue beat(8)0.37%
Revenue beat(12)8
Avg Revenue beat(12)1.03%
Revenue beat(16)10
Avg Revenue beat(16)0.83%
PT rev (1m)12.52%
PT rev (3m)15.34%
EPS NQ rev (1m)4.46%
EPS NQ rev (3m)9.6%
EPS NY rev (1m)0%
EPS NY rev (3m)2.64%
Revenue NQ rev (1m)4.02%
Revenue NQ rev (3m)5.96%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.46%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.67 | ||
| Fwd PE | 28.16 | ||
| P/S | 10.39 | ||
| P/FCF | 33.77 | ||
| P/OCF | 30.95 | ||
| P/B | 26.92 | ||
| P/tB | 51.45 | ||
| EV/EBITDA | 22.27 |
EPS(TTM)33.32
EY3.49%
EPS(NY)33.93
Fwd EY3.55%
FCF(TTM)28.29
FCFY2.96%
OCF(TTM)30.87
OCFY3.23%
SpS91.93
BVpS35.48
TBVpS18.57
PEG (NY)15.66
PEG (5Y)1.09
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 25.28% | ||
| ROE | 86.56% | ||
| ROCE | 43.39% | ||
| ROIC | 37.75% | ||
| ROICexc | 60.42% | ||
| ROICexgc | 86.16% | ||
| OM | 42.77% | ||
| PM (TTM) | 33.41% | ||
| GM | 62.33% | ||
| FCFM | 30.78% |
ROA(3y)22.41%
ROA(5y)22.77%
ROE(3y)94.85%
ROE(5y)116.64%
ROIC(3y)34.71%
ROIC(5y)32.97%
ROICexc(3y)55.09%
ROICexc(5y)50.17%
ROICexgc(3y)91.18%
ROICexgc(5y)91.19%
ROCE(3y)39.89%
ROCE(5y)37.89%
ROICexcg growth 3Y-2.93%
ROICexcg growth 5Y4.19%
ROICexc growth 3Y8.71%
ROICexc growth 5Y17.38%
OM growth 3Y1.27%
OM growth 5Y7.31%
PM growth 3Y-2.51%
PM growth 5Y9.77%
GM growth 3Y-0.28%
GM growth 5Y1.51%
F-Score9
Asset Turnover0.76
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.25 | ||
| Debt/FCF | 1.57 | ||
| Debt/EBITDA | 1.05 | ||
| Cap/Depr | 86.33% | ||
| Cap/Sales | 2.8% | ||
| Interest Coverage | 17.76 | ||
| Cash Conversion | 72.98% | ||
| Profit Quality | 92.12% | ||
| Current Ratio | 2.62 | ||
| Quick Ratio | 1.83 | ||
| Altman-Z | 9.13 |
F-Score9
WACC11.37%
ROIC/WACC3.32
Cap/Depr(3y)79.22%
Cap/Depr(5y)78.35%
Cap/Sales(3y)2.96%
Cap/Sales(5y)3.11%
Profit Quality(3y)100.05%
Profit Quality(5y)96.92%
High Growth Momentum
Growth
EPS 1Y (TTM)40.24%
EPS 3Y16.32%
EPS 5Y26.37%
EPS Q2Q%42.12%
EPS Next Y1.83%
EPS Next 2Y7.65%
EPS Next 3Y7.2%
EPS Next 5Y8.86%
Revenue 1Y (TTM)23.89%
Revenue growth 3Y9.69%
Revenue growth 5Y15.93%
Sales Q2Q%23.59%
Revenue Next Year2.9%
Revenue Next 2Y6.14%
Revenue Next 3Y5.65%
Revenue Next 5Y6.73%
EBIT growth 1Y36%
EBIT growth 3Y11.08%
EBIT growth 5Y24.4%
EBIT Next Year12.59%
EBIT Next 3Y9.53%
EBIT Next 5Y8.15%
FCF growth 1Y23.44%
FCF growth 3Y7.58%
FCF growth 5Y18.14%
OCF growth 1Y23.37%
OCF growth 3Y7.21%
OCF growth 5Y18.07%