KLA (KLAC) AI Stock Analysis

• Market Cap: $197.49B
• Dividend Yield: 0.58%
• Average Volume (3M): 1.18M
• Price to Earnings (P/E): 43.2
• 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: 743,525
• 30 Day Avg. Volume: 1,178,857
• 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: 16.25
• Enterprise Value/Gross Profit: 26.25
• Enterprise Value/Ebitda: 35.04
• 1Y Price Target: $1,718.87
• Price Target Upside: 14.09% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 23
• EPS Forecast (FY): 36.48
• Revenue Forecast (FY): $13.37B

• Rating: 77 Outperform
• Price Target: $1,511.00 ▲(0.29% Upside)
• Action: Reiterated Date: 02/06/26
• Date: Action: Reiterated 02/06/26

KLAC scores well primarily on high-quality financial performance (best-in-class margins and strong free cash flow) and a constructive earnings outlook with solid guidance. The score is tempered by a still-leveraged balance sheet, mixed/weak near-term technical signals, and a relatively expensive valuation with a low dividend yield.

Positive Factors

Exceptional margins and profitability

Sustained industry-leading margins give KLA durable operating leverage and strong cash generation. High gross and EBIT margins support R&D and margin resilience through cycles, enabling reinvestment, shareholder returns, and superior return on capital over a multi-quarter to multi-year horizon.

Robust free cash flow and capital returns

Consistent, large free cash flow provides flexibility to fund R&D, sustain dividends and buybacks, and support M&A without heavy equity issuance. Strong cash conversion and a track record of returns indicate durable financial capacity to navigate industry cycles and prioritize capital allocation.

Process control and services growth profile

Recurring services and process-control strength build a sticky, high-margin revenue base that smooths cyclicality. Long-term services CAGR and process-control share gains underpin predictable aftermarket sales, improving revenue durability and expanding installed base monetization over several years.

Negative Factors

Moderate leverage on balance sheet

A still-elevated debt load reduces financial flexibility during downturns and increases interest exposure. Leverage amplifies operating cyclicality effects, can constrain opportunistic M&A or capital returns if WFE weakens, and makes liquidity management more critical over medium-term cycles.

Cyclicality and China market uncertainty

Significant exposure to cyclical WFE and a large China revenue share creates earnings volatility and geopolitical/regulatory risk. Uneven China recovery can materially affect demand for capital equipment, making multi-quarter growth and revenue visibility sensitive to external market and policy shifts.

Supply constraints and extended lead times

Persistent supply-chain and customer facility readiness issues can delay revenue recognition and compress near-term growth. Longer lead times increase working capital needs, risk order cancellations or timing shifts, and can defer the materialization of expected market share gains across quarters.

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 generates revenue primarily through the sale of its semiconductor equipment and related services. The company's key revenue streams include the sale of inspection and metrology tools, which are critical for ensuring quality and precision in semiconductor manufacturing. KLA also earns revenue from software solutions that aid in data analysis and process optimization, as well as from service contracts that provide ongoing support and maintenance for its equipment. Significant partnerships with leading semiconductor manufacturers and technology companies further bolster KLA's earnings by integrating their solutions into high-volume production environments. Additionally, ongoing advancements in semiconductor technology and increasing demand for chips in various applications, such as AI and IoT, contribute positively to KLA's revenue growth.

KLA Financial Statement Overview

Summary

Strong overall fundamentals driven by exceptional profitability (TTM gross margin ~62%, net margin ~34%, EBIT margin ~41%) and robust cash generation (TTM FCF ~$4.4B with healthy conversion ~91% of net income). Balance sheet is solid but still moderately leveraged (debt-to-equity ~1.22), which is a key constraint in a cyclical industry.

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: 1506.65
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 1506.65 is above the 20-day moving average (MA) of 1467.65, above the 50-day MA of 1394.49, and above the 200-day MA of 1080.06, indicating a bullish trend. The MACD of 21.79 indicates Negative momentum. The RSI at 56.82 is Neutral, neither overbought nor oversold. The STOCH value of 80.57 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
LRCX	80 Outperform	$305.01B	49.65	65.56%	0.56%	25.66%	46.68%
KLAC	77 Outperform	$197.49B	43.22	100.73%	0.58%	22.27%	45.32%
ADI	76 Outperform	$173.84B	64.87	7.86%	1.43%	16.89%	39.29%
AMAT	76 Outperform	$299.93B	38.26	38.86%	0.69%	4.47%	0.48%
AMD	71 Outperform	$348.65B	80.85	7.08%	―	31.83%	80.45%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
INTC	57 Neutral	$230.37B	-563.13	-0.25%	―	-1.49%	―

KLA Corporate Events

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.

KLA Announces Cash Dividend Amid Shareholder Meeting

On November 5, 2025, KLA held its annual meeting of stockholders where three proposals were considered, including the election of ten directors, ratification of PricewaterhouseCoopers LLP as the independent auditor, and approval of executive compensation. Notably, Emiko Higashi and Gary Moore ended their terms, with Michael McMullen appointed as Chair of the Compensation and Talent Committee. Additionally, on November 6, 2025, KLA announced a cash dividend of $1.90 per share, payable on December 2, 2025, reflecting the company’s ongoing commitment to returning value to shareholders.

The most recent analyst rating on (KLAC) stock is a Buy with a $1450.00 price target. To see the full list of analyst forecasts on KLA stock, see the KLAC Stock Forecast page.