KLA (KLAC) Beats Market Returns: Some Facts to Consider

KLA (KLAC) ended the recent trading session at $814.87, showing a change of +0.19% from the previous day’s closing price. The stock outpaced the S&P 500’s daily gain of 0.09%. At the same time, the Dow Jones gained 0.09% and the tech-heavy Nasdaq gained 0.3%.

Shares of the semiconductor manufacturing equipment maker have gained 5.3% over the past month. Meanwhile, the Computer and Technology sector has gained 6.18%, while the S&P 500 has gained 3.38%.

Investors will be keenly watching KLA’s performance when it next releases its earnings results. The company is expected to report EPS of $6.08, up 12.59% from the year-ago quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.5 billion, up 6.34% from the year-ago period.

For the full year, Zacks Consensus Estimates are projecting earnings of $23.30 per share and revenue of $9.75 billion, which would represent changes of -8.16% and -7.13%, respectively, compared to the previous year.

It is also important for investors to be aware of any recent changes to analyst estimates for KLA. These revisions help show the constantly changing nature of short-term business trends. As a result, positive changes to estimates signify analyst optimism about the company’s business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term stock price momentum. To take advantage of this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has a remarkable outside-audited track record of outperformance, with #1 stocks generating an average annual gain of +25% since 1988. Over the past 30 days, our consensus EPS projection remained stagnant. KLA currently holds a Zacks Rank of #3 (Hold).

From a valuation perspective, KLA is currently exchanging hands at a forward P/E ratio of 34.9. This represents a premium over its industry’s average forward P/E of 20.3.

It is also worth mentioning that KLAC sports a PEG ratio of 3.89. The PEG ratio is similar to the commonly used price-to-earnings ratio, but this measure also incorporates the company’s anticipated earnings growth rate. The Electronics – Miscellaneous Products sector had an average PEG ratio of 2.67 at the end of yesterday’s trading.

The Electronics – Miscellaneous Products industry is part of the Computers and Technology sector. With its current Zacks Industry Rank of 195, this industry ranks in the bottom 23% of all industries, or 250+.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

To follow KLAC in the coming trading sessions, be sure to utilize Zacks.com.

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