What Is KLA Corporation's (NASDAQ:KLAC) Share Price Doing?

Today we're going to take a look at the well-established KLA Corporation (NASDAQ:KLAC). The company's stock saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine KLA’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for KLA

What Is KLA Worth?

According to our valuation model, the stock is currently overvalued by about 26%, trading at US$804 compared to our intrinsic value of $637.28. This means that the opportunity to buy KLA at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since KLA’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of KLA look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. KLA's earnings over the next few years are expected to increase by 76%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? KLAC’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe KLAC should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on KLAC for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for KLAC, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about KLA as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that KLA has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in KLA, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.