KLA (KLAC) AI Stock Analysis

• Market Cap: $141.36B
• Dividend Yield: 0.67%
• Average Volume (3M): 962.05K
• Price to Earnings (P/E): 35.3
• Beta (1Y): 1.83
• Revenue Growth: 24.04%
• EPS Growth: 49.69%
• Country: US
• Employees: 15,000
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 9.38
• Shares Outstanding: 131,961,360
• 10 Day Avg. Volume: 992,764
• 30 Day Avg. Volume: 962,055
• 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: 0.85
• Enterprise Value/Revenue: 9.91
• Enterprise Value/Gross Profit: 16.18
• Enterprise Value/Ebitda: 22.74
• 1Y Price Target: $985.22
• Price Target Upside: -6.98% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 20

• Rating: 80 Outperform
• Price Target: $1,003.00 ▼(-5.30% Downside)

KLA's strong financial performance and positive earnings call are the most significant factors driving the overall score. Technical analysis and valuation provide a balanced view, with some caution due to mixed technical signals and moderate valuation. The company's strategic focus on advanced packaging and AI infrastructure supports its growth outlook, despite external challenges like tariffs and reduced demand from China.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand for KLA's products and services, positioning the company well in the semiconductor industry.

Cash Flow Generation

Exceptional cash flow generation enhances financial flexibility, enabling strategic investments and shareholder returns.

Advanced Packaging Growth

Growth in advanced packaging reflects KLA's strategic focus on high-demand areas, supporting long-term competitive positioning.

Negative Factors

Reliance on Debt

High reliance on debt could pose financial risks if not managed carefully, potentially impacting future financial stability.

Impact of Tariffs

Tariff impacts on gross margins may pressure profitability, affecting competitive pricing and cost management strategies.

Reduced Demand from China

Reduced demand from China could limit growth opportunities, affecting revenue potential in a key market.

KLA Business Overview & Revenue Model

Company Description

KLA Corporation (KLAC) is a leading provider of process control and yield management solutions for the semiconductor and related industries. The company operates primarily in the semiconductor equipment sector, offering a wide range of products and services that enhance the productivity and reliability of manufacturing processes. KLA's core offerings include advanced inspection, metrology, and data analytics systems designed to monitor and improve semiconductor fabrication processes, as well as yield management software that helps manufacturers optimize production efficiency.

How the Company Makes Money

KLA generates revenue primarily through the sale of its semiconductor manufacturing equipment, including inspection and metrology tools, which are critical for ensuring the quality and precision of semiconductor devices. The company also earns income from software solutions that support data analysis and yield management, which are essential for semiconductor manufacturers aiming to maximize output and minimize defects. Additionally, KLA benefits from ongoing service and support contracts, which provide a steady stream of recurring revenue. Strategic partnerships with major semiconductor manufacturers and technology companies further bolster KLA's financial performance, allowing the company to stay at the forefront of technology advancements and benefit from industry growth.

KLA Financial Statement Overview

Summary

KLA demonstrates strong financial performance with impressive profitability and growth metrics. The company excels in revenue generation and profit margins, supported by robust cash flows. However, the balance sheet indicates a higher reliance on debt, which requires careful monitoring.

Income Statement

KLA demonstrates strong profitability with a gross profit margin of 60.9% and a net profit margin of 33.4% for TTM. The company has shown significant revenue growth of 23.9% from the previous year. EBIT and EBITDA margins are robust at 41.3% and 42.4%, respectively, indicating efficient cost management and operational excellence.

Balance Sheet

The balance sheet reveals a moderate debt-to-equity ratio of 1.25, suggesting a balanced capital structure. Return on Equity stands impressively at 86.6% for TTM, reflecting strong profitability relative to shareholder equity. However, the equity ratio of 29.2% indicates a higher reliance on debt, which could pose risks if not managed carefully.

Cash Flow

KLA's cash flow is strong, with a free cash flow growth rate of 23.6% compared to the previous year. The operating cash flow to net income ratio is commendable at 1.00, showing efficient cash generation from operations. The free cash flow to net income ratio is also healthy at 0.92, affirming the company's solid cash conversion capabilities.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	12.16B	12.16B	9.81B	10.50B	9.21B	6.92B
Gross Profit	7.44B	7.58B	5.88B	6.28B	5.62B	4.15B
EBITDA	5.30B	5.34B	3.91B	4.50B	4.01B	2.85B
Net Income	4.06B	4.06B	2.76B	3.39B	3.32B	2.08B
Balance Sheet
Total Assets	16.07B	16.07B	15.43B	14.07B	12.60B	10.27B
Cash, Cash Equivalents and Short-Term Investments	4.49B	4.49B	4.50B	3.24B	2.71B	2.49B
Total Debt	6.09B	6.09B	6.82B	6.06B	6.77B	3.55B
Total Liabilities	11.38B	11.38B	12.07B	11.15B	11.20B	6.90B
Stockholders Equity	4.69B	4.69B	3.37B	2.92B	1.40B	3.38B
Cash Flow
Free Cash Flow	3.74B	3.74B	3.03B	3.33B	3.01B	1.95B
Operating Cash Flow	4.08B	4.08B	3.31B	3.67B	3.31B	2.19B
Investing Cash Flow	-202.48M	-202.48M	-1.48B	-486.87M	-876.46M	-500.40M
Financing Cash Flow	-3.79B	-3.79B	-1.78B	-2.83B	-2.26B	-1.50B

KLA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1059.10
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 1059.1 is above the 20-day moving average (MA) of 962.42, above the 50-day MA of 926.26, and above the 200-day MA of 783.78, indicating a bullish trend. The MACD of 45.86 indicates Negative momentum. The RSI at 74.74 is Negative, neither overbought nor oversold. The STOCH value of 91.07 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	82 Outperform	161.82B	30.90	54.33%	0.74%	23.68%	43.16%
KLAC	80 Outperform	$141.36B	35.28	100.78%	0.67%	24.04%	49.69%
ADI	78 Outperform	122.31B	63.25	5.74%	1.57%	7.08%	18.39%
AMAT	76 Outperform	160.48B	24.02	35.03%	0.86%	6.70%	-5.95%
AMD	73 Outperform	261.08B	92.83	4.75%	―	27.17%	108.67%
INTC	63 Neutral	145.81B	-7.14	-20.95%	0.40%	-3.72%	-2120.70%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

KLA Corporate Events

KLA Announces Board Changes and Dividend Declaration

On August 7, 2025, KLA Corporation announced the retirement of Gary Moore and Emiko Higashi from its Board of Directors, effective at the 2025 annual meeting of stockholders. The Board plans to nominate Tracy Embree and Jason Conley as new directors. Additionally, KLA declared a quarterly cash dividend of $1.90 per share, payable on September 3, 2025, to shareholders of record as of August 18, 2025. These changes reflect KLA’s ongoing commitment to strategic leadership and shareholder value.

KLA Secures New $1.5 Billion Credit Agreement

On July 3, 2025, KLA Corporation entered into a new Credit Agreement with several financial institutions, replacing its previous revolving credit facility from June 8, 2022. The new agreement provides a five-year unsecured revolving credit facility of $1.5 billion, with options for extensions and increases, and includes sustainability-linked pricing components. The facility will support general corporate purposes, including debt repayment, and features flexible borrowing and repayment terms. The agreement also includes customary covenants and events of default provisions, ensuring financial discipline and risk management for KLA.