KLA (KLAC) AI Stock Analysis

• Market Cap: $188.52B
• Dividend Yield: 0.58%
• Average Volume (3M): 1.05M
• Price to Earnings (P/E): 34.9
• Beta (1Y): 1.93
• Revenue Growth: 22.27%
• EPS Growth: 45.32%
• Country: US
• Employees: 15,000
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 8.85
• Shares Outstanding: 131,076,610
• 10 Day Avg. Volume: 1,037,860
• 30 Day Avg. Volume: 1,046,834
• PEG Ratio: 0.59
• Price to Book (P/B): 25.39
• Price to Sales (P/S): 9.80
• P/FCF Ratio: 31.85
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 15.57
• Enterprise Value/Gross Profit: 25.16
• Enterprise Value/Ebitda: 33.59
• 1Y Price Target: $1,734.20
• Price Target Upside: 20.58% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 22
• EPS Forecast (FY): 36.57
• Revenue Forecast (FY): $13.41B

• Rating: 75 Outperform
• Price Target: $1,586.00 ▲(10.27% Upside)
• Action: Reiterated Date: 03/13/26
• Date: Action: Reiterated 03/13/26

The score is driven primarily by excellent underlying financial performance (best-in-class margins and strong free cash flow) and a solid, optimistic earnings outlook. These strengths are partially offset by a softer near-term technical picture and a relatively expensive valuation, with moderate leverage and near-term margin/supply headwinds as additional risks.

Positive Factors

Industry-leading margins

Sustained ~62% gross and ~34% net margins indicate durable pricing power and differentiated product mix. High margins provide persistent ability to fund R&D, absorb cyclical downturns, and sustain operating leverage, supporting long-term profitability and strategic reinvestment.

Strong free cash flow generation

Robust FCF near earnings supports disciplined capital allocation: dividends, buybacks, and R&D. High cash conversion reduces dependence on external financing, sustains shareholder returns and balance sheet flexibility, and underpins resilience through semiconductor investment cycles.

Market leadership in process control and advanced packaging

Leading share in process control and rapid advanced packaging growth reflect structural positioning in high-value segments. Recurring services and software on a large installed base amplify stickiness, enabling sustained outgrowth of WFE market trends and durable competitive advantage.

Negative Factors

Moderate financial leverage

Leverage above best-in-class levels amplifies earnings volatility across semiconductor cycles and can limit strategic optionality. Elevated debt relative to equity increases sensitivity to demand swings and may constrain capital deployment choices if cyclical downturns reduce cash flow.

Supply constraints and extended lead times

Prolonged component lead times and near-term sell-outs can defer revenue recognition and compress near-term growth visibility. Operational bottlenecks may delay customer ramps, cause mix shifts, and introduce uneven quarterly results that complicate planning and execution over the next several quarters.

DRAM cost headwind and margin volatility

Rising DRAM/component costs and tariff/mix pressures create structural margin swings that can erode near-term gross margins and operating leverage. Even if transitory, persistent input-cost variability increases forecasting uncertainty and could temper margin expansion in 2–6 month horizon.

KLA Business Overview & Revenue Model

Company Description

KLA Corporation designs, manufactures, and markets process control, process-enabling, and yield management solutions for the semiconductor and related electronics industries worldwide. It operates through four segments: Semiconductor Process Control; Specialty Semiconductor Process; PCB, Display and Component Inspection; and Other. The company offers integrated circuit (IC) manufacturing products that comprises wafer inspection and review, and metrology; wafer and substrate defect inspection and metrology; reticle defect inspection and metrology; chemical/materials quality analysis; in situ process management and wafer handling diagnostics for IC and original equipment manufacturer (OEM) manufacturing; software products to provide run-time process control, defect excursion identification, process corrections, and defect classification; and refurbished and remanufactured products. It also provides specialty semiconductor manufacturing, benchtop metrology, surface characterization, and electrical property measurement services for general purpose/ lab applications; etch, plasma dicing, deposition, and other wafer processing technologies and solutions for the semiconductor and microelectronics industry. In addition, the company offers direct imaging, inspection, optical shaping, additive printing, and computer-aided manufacturing and engineering solutions for the PCB market; inspection and electrical testing systems to identify and classify defects, as well as systems to repair defects for the display market; and inspection and metrology systems for quality control and yield improvement in advanced and traditional semiconductor packaging markets. The company was formerly known as KLA-Tencor Corporation and changed its name to KLA Corporation in July 2019. KLA Corporation was incorporated in 1975 and is headquartered in Milpitas, California.

How the Company Makes Money

KLA primarily makes money by selling capital equipment used for semiconductor process control—most notably wafer inspection and metrology systems. These tools are purchased by semiconductor manufacturers (including foundries, logic manufacturers, memory producers, and other device makers) as part of their capital expenditure programs to ramp new fabs, expand capacity, and support technology node transitions; revenue is recognized based on the company’s product sales arrangements and delivery/acceptance terms. In addition to new tool sales, KLA generates recurring revenue from its large installed base through services and support (e.g., tool maintenance, spare parts, upgrades, and service contracts) and through software offerings that help customers analyze manufacturing data and manage yield. The mix of system sales versus services/software can vary with semiconductor industry investment cycles, technology transitions, and utilization of existing fabs, with services typically supported by the ongoing need to keep tools calibrated, repaired, and upgraded over time. KLA’s earnings are influenced by customer concentration typical of the semiconductor equipment industry, the timing of large customer orders, and demand for advanced process control as manufacturing becomes more complex; specific partnerships or customer-by-customer arrangements are not available in this response and are therefore null.

KLA Financial Statement Overview

Summary

Very strong profitability and cash generation (high margins and robust free cash flow), supported by a re-acceleration in TTM results. The main offset is a balance sheet that remains moderately leveraged despite improvement, which can amplify cyclicality.

Income Statement

KLAC shows exceptional profitability, with TTM (Trailing-Twelve-Months) gross margin around 62% and net margin around 34%, supported by strong operating profitability (EBIT margin ~41%). Revenue has re-accelerated meaningfully in TTM (Trailing-Twelve-Months) after a softer FY2024, and earnings appear to be scaling well with revenue. Key watchouts are the industry’s inherent cyclicality and the fact that growth has been uneven year-to-year (including a revenue decline in FY2024).

Balance Sheet

The balance sheet is solid but moderately leveraged: TTM (Trailing-Twelve-Months) debt is higher than equity (debt-to-equity ~1.22), though leverage has improved materially versus FY2022–FY2024 when debt-to-equity was much higher (~2.0 to ~4.8). Profitability on shareholder capital is extremely strong (TTM return on equity ~0.98), but that is partly amplified by leverage and a comparatively modest equity base. Overall, the company looks financially capable, but leverage remains a constraint versus best-in-class balance sheets.

Cash Flow

Cash generation is strong, with TTM (Trailing-Twelve-Months) operating cash flow (~$4.8B) and free cash flow (~$4.4B) both robust and free cash flow growing sharply (TTM free cash flow growth ~13%). Cash conversion is healthy, with free cash flow running at roughly 91% of net income in TTM (Trailing-Twelve-Months), indicating earnings quality is generally supported by cash. A mild caution is that operating cash flow relative to net income is only slightly above 1.0 in TTM (Trailing-Twelve-Months), and prior years showed more variability.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	12.74B	12.16B	9.81B	10.50B	9.21B	6.92B
Gross Profit	7.89B	7.58B	5.88B	6.28B	5.62B	4.15B
EBITDA	5.91B	5.34B	3.90B	4.50B	4.01B	2.85B
Net Income	4.56B	4.06B	2.76B	3.39B	3.32B	2.08B
Balance Sheet
Total Assets	16.72B	16.07B	15.43B	14.07B	12.60B	10.27B
Cash, Cash Equivalents and Short-Term Investments	5.21B	4.49B	4.50B	3.24B	2.71B	2.49B
Total Debt	6.28B	6.09B	6.82B	6.06B	6.77B	3.55B
Total Liabilities	11.25B	11.38B	12.07B	11.15B	11.20B	6.90B
Stockholders Equity	5.47B	4.69B	3.37B	2.92B	1.40B	3.38B
Cash Flow
Free Cash Flow	4.38B	3.74B	3.03B	3.33B	3.01B	1.95B
Operating Cash Flow	4.77B	4.08B	3.31B	3.67B	3.31B	2.19B
Investing Cash Flow	-1.17B	-202.48M	-1.48B	-486.87M	-876.46M	-500.40M
Financing Cash Flow	-2.99B	-3.79B	-1.78B	-2.83B	-2.26B	-1.50B

KLA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1438.24
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KLAC, the sentiment is Positive. The current price of 1438.24 is below the 20-day moving average (MA) of 1467.85, below the 50-day MA of 1461.04, and above the 200-day MA of 1132.08, indicating a bullish trend. The MACD of -2.82 indicates Positive momentum. The RSI at 53.15 is Neutral, neither overbought nor oversold. The STOCH value of 71.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KLAC.

KLA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LRCX	80 Outperform	$273.98B	34.75	62.59%	0.56%	25.66%	46.68%
KLAC	75 Outperform	$188.52B	34.87	95.22%	0.58%	22.27%	45.32%
ADI	73 Outperform	$151.79B	45.73	7.92%	1.43%	16.89%	39.29%
AMAT	72 Outperform	$274.73B	31.26	38.90%	0.69%	4.47%	0.48%
AMD	71 Outperform	$320.51B	80.54	7.18%	―	31.83%	80.45%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
INTC	48 Neutral	$228.57B	-658.38	-0.26%	―	-1.49%	―

KLA Corporate Events

KLA Highlights Strategy and Capital Returns at Investor Day

KLA Corporation held an investor day on March 12, 2026, featuring presentations from its top executives and providing shareholders with updates on the company’s strategy and financial policies. The materials from the event are available on the company’s investor relations website, underscoring its efforts to maintain active communication with the investment community.

On March 11, 2026, KLA’s board raised the anticipated quarterly dividend to $2.30 per share, a 21% increase from the $1.90 per share dividend declared in February 2026, signaling confidence in the company’s cash generation and long-term outlook. The board also authorized a new $7 billion share repurchase program, supplementing an existing $5 billion authorization with $3.94 billion remaining as of December 31, 2025, further emphasizing a capital return strategy that is likely to be closely watched by shareholders and market participants.

Both the dividend policy and the expanded buyback capacity give KLA additional levers to manage its capital structure and return excess cash to investors over time. The flexibility embedded in the repurchase authorizations, including the ability to adjust timing and scale based on market conditions, allows the company to respond dynamically to shifts in its share price and broader economic trends.

The most recent analyst rating on (KLAC) stock is a Buy with a $1750.00 price target. To see the full list of analyst forecasts on KLA stock, see the KLAC Stock Forecast page.

KLA Declares Regular Quarterly Dividend, Reinforcing Shareholder Returns

On February 5, 2026, KLA Corporation announced that its board of directors declared a regular quarterly cash dividend of $1.90 per share on its common stock, payable on March 3, 2026, to shareholders of record as of the close of business on February 17, 2026. The move underscores KLA’s ongoing capital return strategy and signals continued confidence by the board in the company’s financial position and cash-generation capabilities, providing direct income to shareholders while reinforcing its standing as a mature, cash-generative player in the semiconductor and electronics equipment industry.

The most recent analyst rating on (KLAC) stock is a Buy with a $1800.00 price target. To see the full list of analyst forecasts on KLA stock, see the KLAC Stock Forecast page.