One-glance verdict
Overvalued
$72.81 our estimate vs market $218.73
Wall Street consensus: $234.04 (221.4% higher than our fair-value estimate)
200% above our estimate, beyond the bull case
Fundamentals snapshot
KLA Corporation
KLAC · NMS · Technology · Semiconductor Equipment & Materials
Current price
$218.73
52-week range
$83.22 - $307.37
Market cap
$285.72B
Balance sheet
Healthy
16.59x Strong cushion
Net debt $1.19B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 7.7% last year.
- Reward Returns 95.0% on equity, ahead of 83% of its peers.
- Risk Stock trades 132.6% above its 5-year average P/E.
- Risk Insider ownership is only 0.1% (peer median: 0.3%).
What this company does
KLA Corporation
KLA Corporation acts as the quality inspector for companies that make semiconductors (the tiny electronic chips that power everything from phones to cars). Most of KLA's revenue (the total money it brings in) comes from selling highly advanced inspection and measurement systems that help chipmakers find microscopic flaws during production. This is critical because it helps manufacturers increase their yield (the number of working chips they get from each batch), which is essential for making technology more powerful and reliable.
How the company got here
KLA Corporation was formed in 1997 through the merger of two companies, KLA Instruments and Tencor Instruments, which were founded in the mid-1970s. KLA focused on identifying defects in photomasks (the templates for printing circuits), while Tencor specialized in measuring the thickness of film layers on semiconductor wafers. The combination created a leader in process control, which means they help chipmakers manage and improve their manufacturing process. Over the years, KLA has grown by acquiring other companies with complementary technologies, expanding its ability to inspect and measure different parts of the electronics manufacturing process. In 2019, the company changed its name from KLA-Tencor to KLA Corporation to reflect its broader range of products and services.
What it actually does
Think of KLA as the quality control expert for the companies that make computer chips and other electronics. Their highly advanced machines and software inspect and measure the tiny, complex components that go into everything from your smartphone to your car. Chipmakers use KLA's tools to find and fix microscopic defects during the manufacturing process. This helps their customers produce more working chips from each batch, which is called improving the 'yield' (the percentage of good products). Essentially, KLA helps make the technology we rely on every day more reliable and less expensive to produce.
Semiconductor Process Control
This is KLA's largest and most important business, making up the vast majority of its revenue. It provides highly sophisticated equipment and software to semiconductor manufacturers, the companies that make the brains for all our electronic devices. These customers use KLA's tools to inspect and measure silicon wafers (the thin discs that chips are built on) at many different steps in the production process. This allows them to spot and analyze tiny errors that could ruin the final chip, helping them improve their manufacturing efficiency and make more powerful chips.
Specialty Semiconductor Process
This segment provides a range of technologies for specific types of semiconductors and microelectronics. It includes equipment for processes like etching (using chemicals to remove layers from a wafer) and deposition (adding thin films of material onto a wafer). This part of the business serves customers who make specialized chips, such as those used in cars, power electronics, and the Internet of Things (IoT). It's a smaller portion of KLA's overall business but is focused on growing areas of the semiconductor industry.
PCB and Component Inspection
This part of the company focuses on quality control for printed circuit boards (PCBs), which are the green boards that connect all the electronic components in a device. It also provides inspection systems for advanced and traditional semiconductor packaging (the protective casing around a chip). Customers in this segment are manufacturers of PCBs and companies that assemble and package microchips. This business became a more significant part of KLA after the acquisition of a company called Orbotech in 2019.
What management is betting on now
KLA's leadership is focused on the increasing complexity of manufacturing the most advanced computer chips. As chip designs become more intricate, especially with the rise of Artificial Intelligence (AI), the need for precise inspection and measurement becomes even more critical. The company is also investing heavily in solutions for 'advanced packaging,' a method of combining different types of chips together to create more powerful and efficient systems. Another key priority is growing their service business, which provides ongoing support and optimization for the equipment they have already sold to customers, creating a steady and recurring source of revenue.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$831.87M
FY2025 Q1
$934.85M
FY2025 Q2
$757.19M
FY2025 Q3
$990.02M
FY2025 Q4
$1.06B
FY2026 Q1
$1.07B
FY2026 Q2
$1.26B
FY2026 Q3
$622.26M
Revenue
$3.42B
Net income
$1.20B
Diluted EPS
9.12
Operating cash flow
$707.45M
Free cash flow
$622.26M
Fetching…
Sources
Revenue
$3.30B
Net income
$1.15B
Diluted EPS
8.68
Operating cash flow
$1.37B
Free cash flow
$1.26B
Fetching…
Sources
Revenue
$3.21B
Net income
$1.12B
Diluted EPS
8.47
Operating cash flow
$1.16B
Free cash flow
$1.07B
Fetching…
Sources
Revenue
$3.17B
Net income
$1.20B
Diluted EPS
9.04
Operating cash flow
$1.16B
Free cash flow
$1.06B
Fetching…
Sources
Revenue
$3.06B
Net income
$1.09B
Diluted EPS
8.16
Operating cash flow
$1.07B
Free cash flow
$990.02M
Fetching…
Sources
Revenue
$3.08B
Net income
$824.53M
Diluted EPS
6.16
Operating cash flow
$849.51M
Free cash flow
$757.19M
Fetching…
Sources
Revenue
$2.84B
Net income
$945.85M
Diluted EPS
7.01
Operating cash flow
$995.24M
Free cash flow
$934.85M
Fetching…
Sources
Revenue
$2.57B
Net income
$836.45M
Diluted EPS
6.16
Operating cash flow
$892.62M
Free cash flow
$831.87M
Fetching…
Sources
Is it cheap or expensive?
Fair value $72.81 vs current price $218.73
Wall Street consensus is the average analyst price target: $234.04 (221.4% higher than our fair-value estimate).
Our most-likely fair value is $72.81 a share — about 66.7% below today's price of $218.73, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net debt $1.2B. Interest coverage 16.6x.
Net debt
$1.19B
Interest coverage
16.59x
KLA Corporation's profit covers its interest bill about 16.6 times over.
Healthy
Worse cushion
Baseline
Better cushion
KLAC
BASELINE
KLA Corporation
Total debt $6.15B Interest coverage 16.59x This is the baseline the peer rows are being compared against.
Total debt $7.27B Interest coverage 31.49x +90% vs KLAC Carries about 1.9x more debt cushion than KLAC.
Total debt $3.73B Interest coverage 33.11x +100% vs KLAC Carries about 2.0x more debt cushion than KLAC.
Total debt $2.26B Interest coverage 95.53x +476% vs KLAC Carries about 5.8x more debt cushion than KLAC.
Total debt $82.40M Interest coverage 100.59x +506% vs KLAC Carries about 6.1x more debt cushion than KLAC.
Total debt $0.00 Interest coverage 4.33x -74% vs KLAC Carries about 3.8x less debt cushion than KLAC.
What you should know
The case for and against KLAC
3 Rewards
2 Risks
Rewards
-
Revenue grew 7.7% last year.
-
Returns 95.0% on equity, ahead of 83% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 132.6% above its 5-year average P/E.
-
Insider ownership is only 0.1% (peer median: 0.3%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
60.93x
Forward P/E
42.63x
P/B
49.03x
P/S
21.82x
EV/EBITDA
49.04x
PEG ratio
2.24x
Profitability
How much profit each dollar creates
Gross margin
61.4%
Operating margin
41.2%
Net margin
35.7%
ROE
95.0%
ROA
21.3%
Health
Liquidity and balance-sheet strength
Debt / equity
1.05x
Current ratio
3.03x
Quick ratio
1.96x
Total debt
$6.15B
Total cash
$4.96B
Growth
How the business has been compounding
Revenue TTM
$13.10B
Revenue 5Y CAGR
15.1%
EPS TTM
3.59
EPS 5Y CAGR
11.5%
Cash flow
How much cash the business throws off
Operating CF TTM
$4.40B
Free CF TTM
$3.75B
FCF margin
28.6%
Dividend
Shareholder payout
Yield
0.4%
Payout ratio
21.5%
Last ex-div date
2026-05-18