Update shared on03 Oct 2025
Fair value Increased 4.60%KLA's analyst price target has risen from $929.68 to $972.48, as analysts point to stronger expected revenue growth and profit margins. This is supported by optimism around U.S.-focused semiconductor manufacturing and positive industry trends.
Analyst Commentary
Recent analyst reports provide a nuanced view of KLA's outlook, highlighting both opportunities and challenges for the company moving forward. Below are the key bullish and bearish takeaways that are influencing sentiment and valuations.
Bullish Takeaways
- Bullish analysts note that KLA is positioned to benefit from policy initiatives that support U.S.-based chip manufacturing. Domestic production incentives may drive increased demand for semiconductor equipment.
- They expect U.S.-focused manufacturers and equipment providers like KLA to see sustained revenue growth, particularly as more leading chipmakers shift some manufacturing operations stateside.
- There is optimism that semicap equipment providers could emerge as long-term beneficiaries from broader industry trends and regulatory changes. This may result in potential upside for margins and profits.
- Despite recent volatility in the broader tech space, bullish perspectives emphasize that industry transitions and re-shoring efforts are likely to provide tailwinds for KLA's business over time.
Bearish Takeaways
- Bearish analysts caution that KLA's shares have already outperformed peers and now trade at a significant premium to group medians. This raises concerns about the sustainability of further upside.
- There is skepticism about the company's ability to deliver incremental earnings growth through 2026, especially as spending is expected to be heavily concentrated in a limited set of advanced node projects.
- Some foresee a transition period for leading edge spending, with fewer immediate growth drivers on the horizon and potential for delayed or uneven customer investments.
- Recent downward adjustments in ratings reflect worries about overvaluation and an absence of clear catalysts that could unlock continued outperformance in the near term.
What's in the News
- From April 1, 2025 to June 30, 2025, KLA repurchased 576,814 shares for $425.51 million. This completed a total repurchase of 17,776,843 shares under its 2022 buyback plan, representing 12.58% of outstanding shares (Key Developments).
- KLA issued earnings guidance for Q1 ending September 30, 2025, projecting total revenues in the range of $3.15 billion, plus or minus $150 million. GAAP diluted EPS is expected between $7.51 and $9.05 (Key Developments).
Valuation Changes
- Consensus Analyst Price Target has increased from $929.68 to $972.48. This reflects higher confidence in KLA’s long-term valuation.
- Discount Rate has risen slightly from 10.17% to 10.26%. This indicates a marginally higher perceived risk or cost of capital.
- Revenue Growth expectations have improved, moving from 6.88% to 7.60%.
- Net Profit Margin forecast has edged up from 35.57% to 35.75%.
- Future P/E multiple has risen from 29.68x to 30.34x. This points to a slightly higher valuation for future earnings.
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.