NasdaqGS:KLAC

Stock Analysis Report

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Executive Summary

KLA Corporation designs, manufactures, and markets process control and yield management solutions for the semiconductor and related nanoelectronics industries worldwide.


Snowflake Analysis

Adequate balance sheet average dividend payer.


Similar Companies

Share Price & News

How has KLA's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: KLAC's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

6.2%

KLAC

4.9%

US Semiconductor

4.3%

US Market


1 Year Return

73.5%

KLAC

39.3%

US Semiconductor

7.4%

US Market

Return vs Industry: KLAC exceeded the US Semiconductor industry which returned 35.1% over the past year.

Return vs Market: KLAC exceeded the US Market which returned 5% over the past year.


Shareholder returns

KLACIndustryMarket
7 Day6.2%4.9%4.3%
30 Day5.8%1.0%0.5%
90 Day38.2%25.7%23.0%
1 Year77.0%73.5%42.0%39.3%9.7%7.4%
3 Year129.2%112.9%85.7%75.7%38.3%29.2%
5 Year313.0%261.5%196.3%167.2%66.0%47.6%

Price Volatility Vs. Market

How volatile is KLA's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is KLA undervalued compared to its fair value and its price relative to the market?

31.46x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: KLAC ($203.59) is trading above our estimate of fair value ($195.2)

Significantly Below Fair Value: KLAC is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: KLAC is good value based on its PE Ratio (31.5x) compared to the Semiconductor industry average (36.7x).

PE vs Market: KLAC is poor value based on its PE Ratio (31.5x) compared to the US market (16.5x).


Price to Earnings Growth Ratio

PEG Ratio: KLAC is poor value based on its PEG Ratio (1.7x)


Price to Book Ratio

PB vs Industry: KLAC is overvalued based on its PB Ratio (13.7x) compared to the US Semiconductor industry average (3x).


Next Steps

Future Growth

How is KLA forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

18.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KLAC's forecast earnings growth (18.7% per year) is above the savings rate (2.2%).

Earnings vs Market: KLAC's earnings (18.7% per year) are forecast to grow slower than the US market (22.8% per year).

High Growth Earnings: KLAC's earnings are forecast to grow, but not significantly.

Revenue vs Market: KLAC's revenue (4.9% per year) is forecast to grow slower than the US market (9.3% per year).

High Growth Revenue: KLAC's revenue (4.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: KLAC's Return on Equity is forecast to be very high in 3 years time (57.4%).


Next Steps

Past Performance

How has KLA performed over the past 5 years?

19.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KLAC has a large one-off loss of $360.4M impacting its March 31 2020 financial results.

Growing Profit Margin: KLAC's current net profit margins (18.3%) are lower than last year (29.8%).


Past Earnings Growth Analysis

Earnings Trend: KLAC's earnings have grown by 19.4% per year over the past 5 years.

Accelerating Growth: KLAC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: KLAC had negative earnings growth (-21.6%) over the past year, making it difficult to compare to the Semiconductor industry average (-10.8%).


Return on Equity

High ROE: Whilst KLAC's Return on Equity (43.95%) is outstanding, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is KLA's financial position?


Financial Position Analysis

Short Term Liabilities: KLAC's short term assets ($4.3B) exceed its short term liabilities ($1.7B).

Long Term Liabilities: KLAC's short term assets ($4.3B) do not cover its long term liabilities ($4.9B).


Debt to Equity History and Analysis

Debt Level: KLAC's debt to equity ratio (148.1%) is considered high.

Reducing Debt: KLAC's debt to equity ratio has reduced from 657.2% to 148.1% over the past 5 years.

Debt Coverage: KLAC's debt is well covered by operating cash flow (48%).

Interest Coverage: KLAC's interest payments on its debt are well covered by EBIT (13.8x coverage).


Balance Sheet


Next Steps

Dividend

What is KLA current dividend yield, its reliability and sustainability?

1.67%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: KLAC's dividend (1.67%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.67%).

High Dividend: KLAC's dividend (1.67%) is low compared to the top 25% of dividend payers in the US market (4.5%).


Stability and Growth of Payments

Stable Dividend: KLAC's dividends per share have been stable in the past 10 years.

Growing Dividend: KLAC's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (49.5%), KLAC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: KLAC's dividends in 3 years are forecast to be well covered by earnings (38.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

6.9yrs

Average management tenure


CEO

Rick Wallace (60yo)

14.5yrs

Tenure

US$20,512,367

Compensation

Mr. Richard P. Wallace, also known as Rick, serves as Independent Director for Proofpoint, Inc., a security and compliance company. Mr. Richard P. Wallace, also known as Rick, has been the Chief Executive  ...


CEO Compensation Analysis

Compensation vs Market: Rick's total compensation ($USD20.51M) is above average for companies of similar size in the US market ($USD11.50M).

Compensation vs Earnings: Rick's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Richard Wallace
President14.5yrsUS$20.51m0.055% $17.5m
Bren Higgins
Executive VP & CFO6.92yrsUS$6.91m0.00018% $56.8k
Brian Trafas
Senior Advisor5.25yrsUS$5.60m0.00073% $230.4k
Ahmad Khan
President of Semiconductor Process Control4.92yrsUS$7.45m0.00053% $167.3k
Virendra Kirloskar
Senior VP & Chief Accounting Officer12.33yrsUS$1.31m0.00019% $60.0k
Ben Tsai
CTO & Executive VP of Corporate Alliances26.5yrsUS$1.88mno data
Kevin Kessel
Vice President of Investor Relationsno datano datano data
Becky Howland
Senior Director of Corporate Communicationsno datano datano data
Randi Polanich
Chief Communications Officerno datano datano data
John Van Camp
Executive VP & Chief Human Resources Officer1.5yrsno datano data

6.9yrs

Average Tenure

57yo

Average Age

Experienced Management: KLAC's management team is seasoned and experienced (6.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Richard Wallace
President14.5yrsUS$20.51m0.055% $17.5m
Edward Barnholt
Independent Non-Executive Chairman13.75yrsUS$436.82k0.025% $7.8m
Kenneth Levy
Founder & Chairman Emeritus13.75yrsUS$356.35kno data
Robert Calderoni
Independent Director13.33yrsUS$347.57k0.0067% $2.1m
Emiko Higashi
Independent Director9.67yrsUS$310.07k0.0070% $2.2m
Kevin Kennedy
Independent Director13.17yrsUS$327.57k0.0072% $2.3m
Victor Peng
Independent Director1.42yrsUS$204.60k0.00093% $293.6k
Kiran Patel
Independent Director12.17yrsUS$317.57k0.012% $3.8m
Robert Rango
Independent Director6.5yrsUS$307.57k0.0070% $2.2m
Gary Moore
Independent Director6.5yrsUS$307.57k0.0068% $2.1m

12.7yrs

Average Tenure

63.5yo

Average Age

Experienced Board: KLAC's board of directors are seasoned and experienced ( 12.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

KLA Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: KLA Corporation
  • Ticker: KLAC
  • Exchange: NasdaqGS
  • Founded: 1975
  • Industry: Semiconductor Equipment
  • Sector: Semiconductors
  • Market Cap: US$31.566b
  • Shares outstanding: 155.05m
  • Website: https://www.kla.com

Number of Employees


Location

  • KLA Corporation
  • One Technology Drive
  • Milpitas
  • California
  • 95035
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
KLACNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDOct 1980
KLADB (Deutsche Boerse AG)YesCommon StockDEEUROct 1980
0JPOLSE (London Stock Exchange)YesCommon StockGBUSDOct 1980
KLACWBAG (Wiener Boerse AG)YesCommon StockATEUROct 1980
KLAETLX (Eurotlx)YesCommon StockITEUROct 1980
KLAC *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNOct 1980
K1LA34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 4 REPR 1 COMBRBRLJan 2020

Biography

KLA Corporation designs, manufactures, and markets process control and yield management solutions for the semiconductor and related nanoelectronics industries worldwide. The company offers chip and wafer manufacturing products, including defect inspection and review systems, metrology solutions, in situ process monitoring products, computational lithography software, and data analytics systems for chip manufacturers to manage yield throughout the semiconductor fabrication process. It also provides reticle manufacturing products, such as reticle inspection, metrology, and data analytics systems for mask shops; and packaging manufacturing products comprising standalone and cluster inspection and metrology systems for various applications in the field of semiconductor packaging. In addition, the company offers compound semiconductor, power device, light emitting diode, and microelectromechanical system manufacturing products for the display market; data storage media/head manufacturing products; general purpose/lab applications; and previous-generation KLA systems. Further, it provides wafer processing solutions; printed circuit boards, and display and inspection components; products for the deposition of thin film coating of materials on crystalline silicon photovoltaic wafers; and other services. The company offers its products and services for use by various bare wafer, integrated circuit, reticle, and hard disk drive manufacturers. The company was formerly known as KLA-Tencor Corporation and changed its name to KLA Corporation in July 2019. KLA Corporation was founded in 1975 and is headquartered in Milpitas, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/06 23:55
End of Day Share Price2020/07/06 00:00
Earnings2020/03/31
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.