KLA CORP (KLAC) Stock Analysis
KLA CORP
▾ What's in the 37/100 risk score? (higher = riskier)
Contributions (weight × component score) sum to the total. This near-term score now includes fundamental health (leverage, FCF trend). It excludes the Altman Z score, whose retained-earnings input this filer does not report separately. See the Financial Health section for the full balance-sheet read.
How to read KLAC
We are not publishing an intrinsic value for this one — the section below says exactly why. Everything on this page that comes straight from the filings and the tape is still here; treat the missing valuation as a known gap, not as a verdict on the business.
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Reported earnings & margins ↓
What the company actually reported — unaffected by the valuation being held.
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Balance sheet & book value ↓
Assets, liabilities and equity as filed.
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Who's selling & betting against it ↓
Insider and short-interest behaviour needs no valuation model.
Our DCF for KLAC lands well below today's price. For a non-cyclical that usually means the market is pricing in growth far beyond recent cash flows (or there's a data quirk), so we don't headline a single fair-value number.
What to use instead: The Reverse-DCF shows exactly how much growth the price demands — decide whether that's realistic. Pair it with peer multiples.
This note is only about the single DCF fair-value number — KLAC's full financial statements, health scores, and written analysis are all below.
⚠ We found only 1 genuine same-industry (Optical Instruments & Lenses) comparable — fewer than the 4 we require for a reliable median. The 2 names in the table below therefore include 1 broader Technology name marked fallback, whose business models and margins differ — which is why any median below is computed over that wider set, not over true comparables. So we do not derive a peer-implied share value here. Read the multiples as rough context only.
How does KLAC stack up against its closest peers?
Ideally we compare KLAC only to same-industry peers, but too few exist in our universe right now, so the basket below mixes in broader-sector names. Treat the multiples as rough context, not a valuation. For a leveraged business, EV/EBIT and FCF yield (both in the table) are usually more reliable than EV/Sales, because revenue multiples ignore differences in margins and debt.
▾ What's "EV / Sales" in plain English?
EV (Enterprise Value) = market cap + total debt − cash. It's "what you'd pay to buy the entire company outright" — you pay the market cap to shareholders and take over their debt, but you keep their cash. EV is fairer than market cap alone because it includes the debt the new owner inherits.
EV / Sales = EV ÷ annual revenue. So "2.5×" means investors pay $2.50 of enterprise value per $1 of yearly sales. Higher = market is paying more per dollar of sales (usually because they expect future growth or fat margins).
p25 / median / p75 are the 25th, 50th (middle), and 75th percentile of the peers' multiples. Half the peers fall between p25 and p75. The median (p50) is the typical peer — that's the benchmark we compare to.
Bold middle number = median peer. Half the peers trade above it, half below. Computed over 2 peers (broad — see caveat); implausible multiples excluded.
⚠️ Important caveat: peer multiples only work if the peers are genuinely comparable. Always check the peer list below — if the auto-picker grabbed micro-caps or unrelated businesses, the comparison is noise. A medical-device giant priced against tiny biotech startups won't produce a useful signal.
Quality & solvency checks
Cheap stocks can be cheap for a reason. These screens warn when a low valuation comes paired with structural fragility.
Why it matters: Cheap-looking stocks (low P/E or P/B) often have low Z-scores because the market knows the company is dying. Z-score warns you before you fall into a value trap.
Reference: > 3.0 = safe zone · 1.81–3.0 = grey zone · < 1.81 = distress zone
Full explanation →
We can't produce a trustworthy Altman Z here: retained earnings weren't separately reported in our data, so a core input would have to be fabricated. Rather than show a categorical "distress" verdict from an invented number, we mark it unavailable. Judge financial health from the leverage, cash position, and the measurable Piotroski checks instead.
▾ The checks — what passed, what didn't (and what we couldn't measure)
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✓ Positive net incomeNet income $4,830.8M in FY2026.
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✓ Positive operating cash flowOperating cash flow $4,143.1M (was $4,081.9M the prior year).
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✗ Cash flow backs up reported profitOperating cash flow $4,143.1M vs net income $4,830.8M.Why this matters: When cash generated exceeds reported earnings, profits are high-quality (not propped up by accruals or one-time items).
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✓ Return on assets improvingReturn on assets 26.9% vs 25.3% a year ago.
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✓ Debt load (vs assets)Long-term debt is 32.8% of assets vs 36.6% a year ago ($5,887.4M of $17,951.5M assets).
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✓ Short-term liquidity (current ratio)Current ratio 2.88x vs 2.62x a year ago.
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✓ Share count (dilution)Share count declined 1.4% (1,330.3M → 1,311.5M year-over-year), so the no-dilution check passed. (One-year change; the multi-year buyback pace can differ.)
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· Pricing power (gross margin) (n/a — data not reported; not scored)
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✗ Sales per asset (asset turnover)Asset turnover 0.76x vs 0.76x a year ago. Flat year-over-year — the point requires strict improvement, so it isn't awarded, but this is not deterioration.Why this matters: Asset turnover measures how much revenue each dollar of assets generates. Rising = more productive use of the asset base.
Missing data is never counted as a pass or a fail — it's shown as n/a and excluded from the denominator. Each check compares the company against its own prior year.
What if you assume different inputs?
Here's where we land — and what happens if you change the assumptions. Drag the sliders to set your own Discount RateDiscount Rate — The annual return you demand for taking single-stock risk instead of buying a safe Treasury or index fund.
Why it matters: Higher discount rate = stricter valuation (a stock has to produce more cash to be worth holding). Lower = more generous.
Reference: 8–12% is standard · 9–10% matches S&P 500 historical return · Below 7% is illogical for single-stock risk
Full explanation → (the annual return you demand for single-stock risk) and terminal growth; the value updates live so you can see whether the stock looks cheaper or richer. The discount rate starts at 10.0%, the figure our model used for KLAC. Open Advanced to also change beta, growth and the rate path.
Note: no headline intrinsic value is published for this stock (the valuation is held for a data-quality reason — see the notes above). The calculator below is a what-if tool: the values it produces are your assumptions played out, not our estimate.
A full intrinsic value isn't shown for KLAC because the valuation is currently held for a data-quality reason (see the guardrail notes above). The reverse-DCF reading still works — it needs only the price and cash flow — but we won't publish a forward value until the underlying data passes our checks.
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⚙ Advanced — tinker with every input (beta, growth, rate path, margin → full intrinsic value)
A standard discounted cash flowDCF — Discounted Cash Flow — sums up all future cash a business will produce, adjusted for the fact that future dollars are worth less than dollars today.
Why it matters: It is the most fundamentally honest valuation method when applicable — but only works for companies with predictable, positive cash flow.
Reference: Best for: mature, profitable businesses. Fails for: pre-profit growth, banks, REITs.
Full explanation → (DCF) valuation is not meaningful for KLA Corp, as indicated by the 'Extreme valuation' flag where the market price is significantly above the model output, suggesting data issues or that the market is pricing in factors beyond trailing cash flows. Investors are likely betting on continued revenue growth, which has been 10.2% annually over the last four years, and the company's consistent profitability. The biggest risk to our assumptions is that the market's focus on future growth and optionality might not materialize, leading to a potential re-evaluation of its current valuation, especially given the 'Extreme valuation' flag.
As of 7 days ago
Anatomy of a share
What you're buying per share. Bars are at the same scale so you can see the relative size of revenue, costs, cash flow, and debt — not just read them in a table.
What's free cash flow / what do these mean?
Revenue per share — how much the business earns from customers, divided by the number of shares outstanding. Top of the income statement.
Earnings per share — profit left after operating costs, interest, and taxes, per share. Two versions appear on this page and are not interchangeable: GAAP diluted EPS uses the company's weighted-average diluted share count during the reporting period (this is the "earnings" in "price-to-earnings"); net income per current share divides annual net income by today's share count. They differ whenever the share count has changed.
Owner-earnings free cash flow per share — the cash the business produces for shareholders. Savng's owner-earnings FCF subtracts capital expenditures and stock-based compensation from operating cash flow (SBC is a real dilution cost even though it's non-cash). This is deliberately more conservative than "standard" FCF, which subtracts only capital expenditures — so our figure is lower than the headline FCF you'll see elsewhere. FCF funds dividends, buybacks, debt repayment, and acquisitions; a company can report positive earnings yet negative FCF.
Debt per share — total interest-bearing borrowings divided by shares. High debt-per-share next to thin FCF-per-share is a fragility signal.
What you actually need to decide
Every stock price is a disagreement. Here's the single thing that must go right for the bulls, the single thing that breaks the thesis, and the concrete signposts to watch so you can update your view as real results arrive.
- Quarterly revenue growth rates
- Operating cash flow trends
- New product introductions and adoption
The trend, in plain numbers (FY2025 → FY2026, latest reported)
Straight from the financial statements — no model, no opinion. For a small or unprofitable company, the direction of these numbers usually tells you more than any single valuation.
- Revenue grew +12% to $13.58B.
- Net income grew +19% to $4.83B.
Nothing was clearly worsening year-over-year.
Roughly flat: Free cash flow was roughly flat (within 2%) at $3.46B.
Management & Leadership
Rick Wallace has served as the President and CEO of KLA Corporation since 2006, guiding the company through significant advancements in process control and yield management solutions for the semiconductor industry. Brian Lorig is the Chief Financial Officer, overseeing the company's financial strategy and operations.
What They Make
KLA Corporation manufactures and sells process control and yield management systems for the semiconductor and related nanoelectronics industries. Their primary customers are semiconductor manufacturers, who pay for equipment and services that ensure the quality and performance of integrated circuits.
End Markets
Revenue Drivers
Why Is It Priced Like This?
Why Customers Pay
What we use instead: earnings (P/E, EV/EBIT), book value (P/B) — computed from the figures this company does report, shown in the sections below. Those numbers are unaffected by the missing cash-flow data.
The market is likely pricing KLA Corp based on expectations of continued strong revenue growth, which has been 10.2% annually over the last four years, and its consistent profitability. The 'Extreme valuation' flag suggests investors are valuing optionality, narrative catalysts, or margin expansion beyond what current trailing cash flows support, rather than relying on a traditional DCFDCF — Discounted Cash Flow — sums up all future cash a business will produce, adjusted for the fact that future dollars are worth less than dollars today.
Why it matters: It is the most fundamentally honest valuation method when applicable — but only works for companies with predictable, positive cash flow.
Reference: Best for: mature, profitable businesses. Fails for: pre-profit growth, banks, REITs.
Full explanation → model.
Business Model & Valuation
How They Make Money
Free Cash Flow DCF
Owner-earnings FCF DCF: positive free cash flow (operating cash flow − capex − stock-based comp) in a sector suited for cash-flow-based valuation. High P/FCF (69x) - market pricing significant growth.
Show advanced inputs
| Revenue Growth | 10.2% |
| Eps Growth | -36.1% |
| Historical Fcf Growth | 4.7% |
| Sector Default | 12.0% |
| Sector Default Source | Technology sector default |
| Best Estimate | 10.7% |
| Method | blend(70% revenue_cagr, 30% sector) (buybacks ~1.3%/yr: per-share support, not added to growth) |
| Growth Basis | total |
| Business Growth | 10.7% |
| Buyback Rate | 1.3% |
What this model does NOT do: this is a consolidated owner-earnings FCF model. Standalone segment assumptions: none. It does not project product, services and recurring/cloud lines independently; their combined effect is embedded in the historical revenue and cash-flow trend the model extrapolates. The calculator above can only approximate a segment's impact through the single consolidated growth rate — it cannot model any one line separately. For a true segment-level view, build a separate model from the company's segment disclosures.
Maturity & Competitive Position
Moat Signals
Revenue has been growing at 10.2% annually over the last four years, from $9212M to $13579M.
Geography & Markets
KLA Corp is a US-headquartered company with significant global operations, particularly in regions with major semiconductor manufacturing hubs such as Asia. Specific geographic revenue mix percentages are not available from current data sources.
Geographic Risks
Market Signals
These are timing signals, not value signals — they describe the stock's recent price behavior, not what the business is worth. Use them for the "the thesis looks good, but is now the moment?" question. Each tile below explains what it's saying.
Why it matters: Short-term contrarian indicator. Extreme readings often precede mean reversion, though not always.
Reference: 30–70 normal · >70 overbought · <30 oversold
Full explanation → (14)45.6NeutralMomentum is balanced — neither overbought nor oversold.
Why it matters: When the fast line crosses above the slow line, short-term momentum is turning up; below, turning down. A timing cue, not a value signal.
Reference: Line above signal = bullish momentum · below = bearish
Full explanation →BullishLine above signalThe fast trend is above the slow trend — short-term momentum is currently upward.
Technicals describe price, not the business. A great company can have a "bearish" tape (a buying chance) and a weak one a "bullish" tape (a trap). Pair these with the valuation and health sections above.
QUALITY
Data Quality & Risk Flags (5 notes — click to expand/collapse)
Guardrail Notes (5)
- The company retires ~1.3%/yr of its shares (a multi-year CAGR), but we do NOT add that to the growth rate: buybacks at fair value are value-neutral per current share, and adding them would double-count the same cash the DCF already values. We also do not model future buyback ACCRETION: repurchases below intrinsic value CAN raise value per remaining share, but only if they continue, are funded after debt service, and are made below intrinsic value — excluding that potential benefit keeps the model conservative.
- Price is far above the model output - market may be pricing optionality, narrative catalysts, or margin expansion beyond what trailing cash flows support.
- Extreme valuation: the price is far above the model output for a non-cyclical — likely dominated by a data issue. The model value is suppressed.
- VALUATION HELD (EXTREME_MODEL_GAP): per-share values suppressed due to the model output failed plausibility checks.
- Extreme valuation gap (P/IV withheld — see the note above): result may be dominated by model assumptions, share count issues, or sector-specific dynamics. Treat as low confidence.
FINANCIALS
Financial Statements (5-year tables — click to expand)
From KLA CORP's SEC filings (EDGAR).
Income (5yr)
| Year | Revenue | Net Income | EPS |
|---|---|---|---|
| 2026 | 13.6B | 4.8B | $3.66 |
| 2025 | 12.2B | 4.1B | $3.04 |
| 2024 | 9.8B | 2.8B | $2.03 |
| 2023 | 10.5B | 3.4B | $24.15 |
| 2022 | 9.2B | 3.3B | $21.92 |
Cash Flow (5yr)
| Year | Operating CF | CapEx | − SBC | Free Cash Flow |
|---|---|---|---|---|
| 2026 | 4.1B | 375.9M | 310.2M | 3.5B |
| 2025 | 4.1B | 335.3M | 265.0M | 3.5B |
| 2024 | 3.3B | 277.4M | 212.7M | 2.8B |
| 2023 | 3.7B | 341.6M | 171.4M | 3.2B |
| 2022 | 3.3B | 307.3M | 126.9M | 2.9B |
How we define FCF: operating cash flow − capital expenditure − stock-based compensation (owner-earnings basis — SBC is a real cost to shareholders even though it's non-cash). Latest year: 4.1B − 375.9M − 310.2M (stock-based comp) = 3.5B. This is the same owner-earnings FCF definition the valuation model uses.
Balance Sheet
| Total Assets | 18.0B |
| Total Liabilities | 11.6B |
| Equity | 6.3B |
| Total Debt | 5.9B |