KLA (KLAC) AI Stock Analysis

• Market Cap: $92.33B
• Dividend Yield: 0.9%
• Average Volume (3M): 1.37M
• Price to Earnings (P/E): 29.4
• Beta (1Y): 1.84
• Revenue Growth: 20.44%
• EPS Growth: 44.14%
• Country: US
• Employees: 15,000
• Sector: Technology
• Sector Strength: 66
• Industry: Semiconductors
• EPS (TTM): 27.51
• Shares Outstanding: 132,241,420
• 10 Day Avg. Volume: 1,054,982
• 30 Day Avg. Volume: 1,371,293
• PEG Ratio: 0.67
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.00
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 15.75
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $790.67
• Price Target Upside: 13.25% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

KLA's strong financial performance and positive earnings call results are major contributors to the overall score. Despite challenges from global trade issues, the company continues to show growth. However, high valuation and technical indicators suggest cautious optimism.

Positive Factors

Earnings and Financial Performance

KLA delivered strong results, exceeding consensus expectations, driven by strength in leading-edge foundry/logic and advanced packaging.

Market Position

KLA's pole position in Process Control with significant market share is expected to outpace overall WFE growth.

Shareholder Returns

There is a 12% increase to the dividend and $5 billion allocated for buyback.

Negative Factors

Cost Pressures

Higher input costs are causing a 100 basis points gross margin headwind.

Geopolitical Risks

Services revenue growth decelerated due to export restrictions to China, reducing KLAC's ability to ship equipment spares and upgrades to that region.

Market Risks

The biggest risk identified is the overall wafer fabrication equipment market, along with potential negative impacts from further China export restrictions.

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 Corporation generates revenue primarily through the sale of its high-performance inspection and metrology systems, as well as software solutions that are critical in the semiconductor manufacturing process. The company earns money by providing these cutting-edge tools to semiconductor manufacturers who require precision and efficiency in their production processes. Additionally, KLA offers maintenance, support, and consulting services, which provide a steady stream of recurring revenue. The company's earnings are significantly influenced by the ongoing demand for semiconductor devices, driven by technological advancements and the proliferation of electronics in various industries. KLA also benefits from strategic partnerships and collaborations with major semiconductor manufacturers and research institutions, which help drive innovation and adoption of its solutions.

KLA Financial Statement Overview

Summary

KLA's financial performance is robust, with strong profitability and revenue growth as shown by its high income statement scores. The balance sheet is solid with moderate leverage and high return on equity, while cash flow metrics indicate effective cash conversion and growth.

Income Statement

KLA demonstrates strong profitability with a gross profit margin of 60.9% and a net profit margin of 32.0% for TTM (Trailing-Twelve-Months). The EBIT and EBITDA margins are also robust at 40.8% and 42.2%, respectively, showcasing efficient operations. Revenue growth from the previous period is notable at 17.7%, indicating a strong upward trajectory.

Balance Sheet

The company's balance sheet shows a moderate debt-to-equity ratio of 1.47, suggesting a balanced use of leverage. Return on equity is impressive at 92.3%, reflecting strong profitability relative to shareholder investments. The equity ratio stands at 26.4%, indicating a moderate level of financial stability and reliance on equity financing.

Cash Flow

KLA's cash flow performance is solid, with a free cash flow to net income ratio of 0.95, indicating effective conversion of profits into cash. The operating cash flow to net income ratio is 1.03, suggesting healthy cash generation. The free cash flow growth rate is 15.9%, showing positive cash flow dynamics.

Breakdown
Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
9.81B	10.50B	9.21B	6.92B	5.81B
	Gross Profit
5.88B	6.28B	5.62B	4.15B	3.36B
	EBIT
3.64B	3.99B	3.65B	2.52B	1.76B
	EBITDA
3.91B	4.41B	4.01B	2.85B	2.10B
	Net Income Common Stockholders
2.76B	3.39B	3.32B	2.08B	1.22B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.50B	3.24B	2.71B	2.49B	1.98B
	Total Assets
15.43B	14.07B	12.60B	10.27B	9.28B
	Total Debt
6.82B	5.89B	6.66B	3.44B	3.47B
	Net Debt
4.84B	3.96B	5.08B	2.01B	1.49B
	Total Liabilities
12.07B	11.15B	11.20B	6.90B	6.60B
	Stockholders Equity
3.37B	2.92B	1.40B	3.38B	2.67B
Cash Flow		Free Cash Flow
3.03B	3.33B	3.01B	1.95B	1.63B
	Operating Cash Flow
3.31B	3.67B	3.31B	2.19B	1.78B
	Investing Cash Flow
-1.48B	-486.87M	-876.46M	-500.40M	-258.87M
	Financing Cash Flow
-1.78B	-2.83B	-2.26B	-1.50B	-1.30B

KLA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 698.16
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 698.16 is above the 20-day moving average (MA) of 659.54, above the 50-day MA of 684.96, and below the 200-day MA of 709.84, indicating a neutral trend. The MACD of 3.16 indicates Negative momentum. The RSI at 54.63 is Neutral, neither overbought nor oversold. The STOCH value of 85.45 is Negative, 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
AMAT	78 Outperform	$126.01B	20.29	35.19%	1.03%	4.45%	-10.01%
ASML	78 Outperform	$254.81B	32.12	55.21%	0.85%	16.46%	21.29%
LRCX	78 Outperform	$95.32B	20.76	53.14%	1.19%	20.33%	31.89%
TSM	77 Outperform	$714.08B	22.30	32.11%	1.08%	35.45%	―
KLAC	75 Outperform	$92.33B	29.36	104.10%	0.90%	20.44%	44.14%
Sector *	60 Neutral	$10.94B	10.48	-7.04%	2.99%	7.55%	-12.20%
INTC	47 Neutral	$89.94B	―	-18.66%	2.42%	-3.97%	-562.40%

KLA Corporate Events

KLA Appoints Jamie E. Samath to Board of Directors

On April 30, 2025, KLA Corporation announced the appointment of Jamie E. Samath to its Board of Directors and Audit Committee. Mr. Samath, who has been with Intuitive Surgical, Inc. for over 12 years, brings extensive experience in financial and business functions, having served as Executive Vice President, Chief Financial Officer, and Head of Business Technology. His appointment is expected to enhance KLA’s strategic direction and governance, with Mr. Samath receiving a prorated grant of restricted stock units and a portion of the annual cash retainer for his board service.

Spark’s Take on KLAC Stock

According to Spark, TipRanks’ AI Analyst, KLAC is a Outperform.

KLA Corporation’s stock is supported by strong financial performance, with robust revenue and income growth. The earnings call underscored resilience against market challenges, although technical analysis indicates potential resistance levels. Valuation suggests a premium, reflecting investor confidence, while the dividend yield remains modest.

To see Spark’s full report on KLAC stock, click here.