Stock analysis · Bull Rankings model

KLAC analysis

KLA CorporationSemiconductor Equipment & Materials. Scored on the same transparent model behind the daily rankings.

Semiconductors
KLAC
KLA Corporation · Semiconductor Equipment & Materials
FCF$3.8bB
Rev+11.7%B
D/E0.97C
P/E50.3xC+
PEG1.79C+
51.0Score
$183.99$240.4B
1Y Target$231.78Analyst consensus · 27 analysts
5Y Target$339.35Compound horizon
10Y Target$503.40Long-dated conviction
FCF$3.8bTTM
B
FCF $3.8b — solid, comfortably covers operations and capital return
Rev+11.7%TTM YoY
B
Revenue +11.7% — at or above S&P median
D/E0.97
C
D/E 0.97 — more levered than most Technology peers (≈90th pctile)
P/E50.3x
C+
P/E 50.3 — above the Technology median (≈75th pctile)
PEG1.79
C+
PEG 1.79 — modest premium; above fair value

Forward price target — the 1-year figure is the analyst consensus where the stock is covered; the 5- and 10-year figures compound our earnings estimate from there. The DCF below is a separate cross-check on intrinsic value (what it's worth today), not another target.

Quality-growth score · 51
Quality67.9
Growth84.7
Value23.1
Why this score
  • Raising its dividend
Entry · Margin of safety
52-week rangeMid-range
40% off the 12-month high
vs DCF fair value302% aboveest. fair value ~$46
What the price assumes: free cash flow compounding at ~52% a year for the next decade — vs the ~21% a year our model projects from current growth and analyst estimates.
Quality signals · context only
Gross profitability46% · A-gross profit ÷ total assets (Novy-Marx)
ROIC4.7% · C+return on invested capital — not score-weighted

Model-generatedGenerated by the Bull Rankings model from this company's reported fundamentals, and checked against the figures shown above.

Why now
KLA’s dominance in semiconductor process‑control tools for leading‑edge fabs fuels a compounding engine: revenue is climbing 11.7% YoY, profit margins sit at a hefty 35.6%, and free cash flow hits $3.8 B on a $240.4 B market cap, delivering a ROE of 76.1%. Our model flags Growth as the strongest pillar, and the 52% implied FCF growth in the reverse‑DCF shows the market already prices in aggressive expansion, but the underlying 11.7% revenue rise still leaves upside if KLA captures more advanced‑node spend. The thesis rests on continued adoption of its inspection and metrology systems as the industry pushes sub‑3nm nodes.
Moat
KLA’s inspection and metrology suite is embedded in the critical yield‑management workflow of every leading wafer fab, creating switching costs that lock customers into its ecosystem. The company’s IP‑rich hardware and software stack lets it command premium pricing, which translates into the 76.1% ROE—pricing power derived from being the de‑facto supplier for semiconductor process control.
Risk
The stock trades at a lofty P/E of 50.3 and a beta of 1.46, reflecting market optimism that may be overstated given revenue growth of only 11.7% and a debt‑to‑equity of 0.97, which could constrain flexibility in a downturn. A slowdown in advanced‑node fab spending would force the valuation down to historic levels, confirming the bear case if the implied 52% FCF growth proves unsustainable.
Horizon
1-3 yr $231.78 (27-analyst consensus) — fundamentals + valuation re-rating. 5 yr $339.35 at ~13% CAGR — compounding case rests on the competitive position widening. 10 yr $503.40 if current growth sustains into durable earnings power.
Not investment advice. The Bull Rankings publishes a quantitative ranking model and accompanying analysis for general informational purposes only. Nothing on this page is a recommendation to buy, sell, or hold any security; nothing is personalized to your circumstances, risk tolerance, or tax situation. Investing carries the risk of loss — invest at your own risk and consider consulting a licensed financial professional before acting on anything you read here. See terms and methodology for full disclosures.

KLAC vs the Top Picks average

PillarKLACBook avgDiff
Quality0.680.84-0.16
Growth0.850.84in line
Value0.230.78-0.55

Averaged across the 30 names in today's Top Picks (mean score 81.5). A name can beat these averages and still be absent from the book — it also applies concentration limits.

Trend
+6.3 over 47 daily scores
From 44.7 (Jun 22) → 51.0 (now)

One point per daily model run. The range autoscales, so a flat-looking line can still hide 1–2 point moves — read the From → To values for the actual range.

Analyst estimate revisions

30-day change+0.5%
90-day change+3.4%
Forward EPS estimate$6.60

Over the last 90 days, what analysts expect KLAC to earn is drifting higher (+3.4%). The estimate is derived from price and forward P/E captured at the same instant, so a moving share price does not move this number — only a changed forecast does.

A fiscal-year roll fell inside this window: the forward horizon moved on to the next financial year, which shifts the earnings figure without any analyst changing their view. That step is excluded, so the number above covers the rest of the window rather than all of it.

A rising estimate means expectations are improving, not that the price has failed to keep up — and estimates get cut as readily as they get raised. It is not part of the Bull Rankings score. Biggest movers across the market →

Shares to buy
10
Position size
$1,840
3.7% of portfolio
Stop price
$137.99
25% below $183.99
$ at risk if stopped
$459.98
budget $500.00 · 1% of portfolio

Math only — share count is floor(portfolio × risk% ÷ (price × stop%)). Doesn't account for commissions, slippage, gap risk, or position-correlation across your book. Inputs persist locally; never sent to the server. Not investment advice.

KLA Corporation (KLAC): score, valuation & FAQ

KLA Corporation (KLAC) is a Semiconductor Equipment & Materials company that scores 51 out of 100 on the Bull Rankings quality-growth model — a middling reading. The score blends three pillars — quality (durable returns, healthy margins, low leverage), growth (revenue and earnings), and value (valuation versus sector peers) — into one number, refreshed daily; it is a screen, not a buy recommendation.

On valuation, KLAC sits about 302% above our discounted-cash-flow fair value — the current price implies roughly 52% annual free-cash-flow growth over the next decade.

Is KLAC a good stock to buy?

Bull Rankings scores KLAC 51 out of 100 on its quality-growth model, which is a middling reading. A score is a quantitative screen of KLA Corporation's fundamentals, not personalised financial advice — weigh it against your own time horizon and risk tolerance, and read the risk factors below before acting.

Why does KLAC score 51 on Bull Rankings?

The quality-growth score blends three pillars — quality (returns on capital, margins, leverage, earnings quality), growth (revenue and earnings expansion), and value (valuation versus sector peers). KLAC grades middle-of-pack across the strip. Each pillar is graded against sector-aware thresholds, then combined into the single 0–100 score.

Is KLAC overvalued or undervalued?

Based on $183.99, KLAC sits about 302% above our discounted-cash-flow fair value — the current price implies roughly 52% annual free-cash-flow growth over the next decade. It trades at a 50.3x P/E (graded C+). Discounted-cash-flow estimates are sensitive to growth and discount-rate assumptions, so treat this as a cross-check, not a price target.

What are the main risks of investing in KLAC?

The stock trades at a lofty P/E of 50.3 and a beta of 1.46, reflecting market optimism that may be overstated given revenue growth of only 11.7% and a debt‑to‑equity of 0.97, which could constrain flexibility in a downturn. A slowdown in advanced‑node fab spending would force the valuation down to historic levels, confirming the bear case if the implied 52% FCF growth proves unsustainable.

New to these metrics? The guides explain free cash flow, how the score works, and more in the learn hub — or run another name through the screener.

Bull Rankings is an automated fundamentals screen for research and education. It is not investment advice, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a licensed financial advisor.

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