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. More Details


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 is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: KLAC's weekly volatility (6%) has been stable over the past year.


Market Performance


7 Day Return

3.5%

KLAC

1.9%

US Semiconductor

1.8%

US Market


1 Year Return

54.4%

KLAC

46.2%

US Semiconductor

20.4%

US Market

Return vs Industry: KLAC exceeded the US Semiconductor industry which returned 44.6% over the past year.

Return vs Market: KLAC exceeded the US Market which returned 19% over the past year.


Shareholder returns

KLACIndustryMarket
7 Day3.5%1.9%1.8%
30 Day23.2%7.4%6.0%
90 Day18.0%12.9%6.8%
1 Year57.2%54.4%48.9%46.2%23.2%20.4%
3 Year150.4%133.6%83.6%74.0%47.4%37.6%
5 Year317.3%268.7%251.2%217.9%91.9%70.8%

Long-Term 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?

30.25x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: KLAC ($250.37) is trading above our estimate of fair value ($182.23)

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 (30.2x) compared to the US Semiconductor industry average (36.8x).

PE vs Market: KLAC is poor value based on its PE Ratio (30.2x) compared to the US market (19.5x).


Price to Earnings Growth Ratio

PEG Ratio: KLAC is poor value based on its PEG Ratio (2.9x)


Price to Book Ratio

PB vs Industry: KLAC is overvalued based on its PB Ratio (14.1x) compared to the US Semiconductor industry average (3.4x).


Next Steps

Future Growth

How is KLA forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

10.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KLAC's forecast earnings growth (10.3% per year) is above the savings rate (2.2%).

Earnings vs Market: KLAC's earnings (10.3% per year) are forecast to grow slower than the US market (21.9% per year).

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

Revenue vs Market: KLAC's revenue (4.3% per year) is forecast to grow slower than the US market (10.2% per year).

High Growth Revenue: KLAC's revenue (4.3% 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 (54.3%).


Next Steps

Past Performance

How has KLA performed over the past 5 years?

15.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KLAC has high quality earnings.

Growing Profit Margin: KLAC's current net profit margins (21.8%) are lower than last year (23%).


Past Earnings Growth Analysis

Earnings Trend: KLAC's earnings have grown by 15.8% per year over the past 5 years.

Accelerating Growth: KLAC's earnings growth over the past year (14.6%) is below its 5-year average (15.8% per year).

Earnings vs Industry: KLAC earnings growth over the past year (14.6%) underperformed the Semiconductor industry 22.8%.


Return on Equity

High ROE: Whilst KLAC's Return on Equity (46.65%) 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 ($4.8B) exceed its short term liabilities ($1.7B).

Long Term Liabilities: KLAC's short term assets ($4.8B) do not cover its long term liabilities ($4.8B).


Debt to Equity History and Analysis

Debt Level: KLAC's debt to equity ratio (123.8%) is considered high.

Reducing Debt: KLAC's debt to equity ratio has reduced from 1064.4% to 123.8% over the past 5 years.

Debt Coverage: KLAC's debt is well covered by operating cash flow (52.5%).

Interest Coverage: KLAC's interest payments on its debt are well covered by EBIT (13.6x coverage).


Balance Sheet


Next Steps

Dividend

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

1.44%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: KLAC's dividend (1.44%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.5%).

High Dividend: KLAC's dividend (1.44%) is low compared to the top 25% of dividend payers in the US market (4.15%).


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 (41.7%), 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 (31.4% payout ratio).


Next Steps

Management

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

5.3yrs

Average management tenure


CEO

Rick Wallace (60 yo)

14.83yrs

Tenure

US$13,324,375

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 ($USD13.32M) is about average for companies of similar size in the US market ($USD10.98M).

Compensation vs Earnings: Rick's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Richard Wallace
President14.83yrsUS$13.32m0.058%
$ 22.6m
Bren Higgins
Executive VP & CFO7.25yrsUS$5.28m0.0036%
$ 1.4m
Ahmad Khan
President of Semiconductor Process Control5.25yrsUS$5.90m0.0028%
$ 1.1m
Brian Lorig
Executive VP and GM of Global Support & Services4.67yrsUS$2.48m0.00037%
$ 143.1k
Oreste Donzella
Executive Vice President - Electronics0.67yrUS$2.45m0.0036%
$ 1.4m
Virendra Kirloskar
Senior VP & Chief Accounting Officer12.67yrsUS$1.31m0.00019%
$ 73.5k
Ben Tsai
CTO & Executive VP of Corporate Alliances26.83yrsUS$1.88mno data
Kevin Kessel
Vice President of Investor Relationsno datano datano data
MaryBeth Wilkinson
Executive VP0.17yrno datano data
Becky Howland
Senior Director of Corporate Communicationsno datano datano data
Randi Polanich
VP & Chief Communications Officerno datano datano data
John Van Camp
Executive VP & Chief Human Resources Officer1.83yrsno datano data

5.3yrs

Average Tenure

54yo

Average Age

Experienced Management: KLAC's management team is seasoned and experienced (5.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Richard Wallace
President14.83yrsUS$13.32m0.058%
$ 22.6m
Edward Barnholt
Independent Non-Executive Chairman14.08yrsUS$438.33k0.026%
$ 10.0m
Kenneth Levy
Founder & Chairman Emeritus14.08yrsUS$356.35kno data
Robert Calderoni
Independent Director13.67yrsUS$348.56k0.0075%
$ 2.9m
Emiko Higashi
Independent Director10yrsUS$308.56k0.0078%
$ 3.0m
Kevin Kennedy
Independent Director13.5yrsUS$329.18k0.0047%
$ 1.8m
Victor Peng
Independent Director1.75yrsUS$308.56k0.0017%
$ 649.7k
Kiran Patel
Independent Director12.5yrsUS$318.56k0.0071%
$ 2.7m
Robert Rango
Independent Director6.83yrsUS$313.56k0.0077%
$ 3.0m
Gary Moore
Independent Director6.83yrsUS$323.56k0.0075%
$ 2.9m
Marie Myers
Independent Director0.75yrUS$199.29k0.00056%
$ 216.6k
Jeneanne Hanley
Independent Director1.42yrsUS$359.88k0.0012%
$ 471.8k

11.3yrs

Average Tenure

62yo

Average Age

Experienced Board: KLAC's board of directors are seasoned and experienced ( 11.3 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$38.672b
  • Shares outstanding: 154.46m
  • 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 m...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/11/25 00:21
End of Day Share Price2020/11/24 00:00
Earnings2020/09/30
Annual Earnings2020/06/30


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.