IMPORTANT DISCLAIMER: Blank Capital Research ("BCR") is a technology platform, not a registered investment advisor or broker-dealer. The algorithmically generated signals, scores, and rankings provided on this site ("God Mode" Signals) are for informational and research purposes only and do not constitute financial advice, investment recommendations, or an offer to sell or solicit an offer to buy any securities.
HYPOTHETICAL PERFORMANCE RESULTS: The "timing scores" and "regime signals" displayed are based on quantitative models. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity.
RISK OF LOSS: Trading in financial markets involves a high degree of risk and may result in the loss of your entire investment. Data provided by third-party sources (Intrinio, Snowflake) is believed to be reliable but is not guaranteed for accuracy or completeness. Past performance is not indicative of future results.
Relative valuation derived from Technology sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
76.5%
Sector: -1.4%
Dividend Analysis audit
GROWTH
0.61%
Trailing Yield
$0.61
Per $100 Invested
Modest dividend — capital prioritized for reinvestment.
Est. Payout Ratio
30%SAFE
Analyst Projections
Analyst Consensus
Unlock Valuation Tools
Sign up for free access to institutional-quality research tools.
Based on our 6-factor quantitative model, KLA CORP (KLAC) receives a "Hold" rating with a composite score of 48.1/100, ranked #740 out of 4446 stocks. Key factor scores: Quality 50/100, Value 40/100, Momentum 70/100. This is quantitative analysis only — not investment advice.
KLA CORP (KLAC) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does KLA CORP Do?
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 manufacturing products, including defect inspection and review systems, metrology solutions, in situ process monitoring products, computational lithography software, and data analytics systems for chip manufacturers to manage yield throughout the semiconductor fabrication process. It also provides reticle manufacturing products, such as reticle inspection, metrology, and data analytics systems for mask shops; and packaging manufacturing products comprising wafer inspection and metrology, die sorting and inspection, IC component inspection and metrology, data analytics, wafer processing systems, and IC substrate production processes. In addition, the company offers compound semiconductor, power device, light emitting diode, and microelectromechanical system manufacturing products; data storage media/head manufacturing products; general purpose/lab applications; and previous-generation KLA systems. Further, it provides wafer processing solutions; printed circuit boards, and display and inspection components; and other services. The company was formerly known as KLA-Tencor Corporation and changed its name to KLA Corporation in July 2019. KLA Corporation was incorporated in 1975 and is headquartered in Milpitas, California. KLA CORP (KLAC) is classified as a large-cap stock in the Technology sector, specifically within the Measuring And Control Equipment industry. The company is led by CEO Richard P. Wallace and employs approximately 14,000 people, headquartered in Milpitas, California. With a market capitalization of $199.2B, KLAC is one of the prominent companies in the Technology sector.
KLA CORP (KLAC) Stock Rating — Hold (April 2026)
As of April 2026, KLA CORP receives a Hold rating with a composite score of 48.1/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.KLAC ranks #740 out of 4,446 stocks in our coverage universe. Within the Technology sector, KLA CORP ranks #67 of 584 stocks, placing it in the top quartile of its Technology peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
KLAC Stock Price and 52-Week Range
KLA CORP (KLAC) currently trades at $1753.53. The stock gained $26.27 (1.5%) in the most recent trading session. The 52-week high for KLAC is $1693.35, which means the stock is currently trading 3.6% from its annual peak. The 52-week low is $551.33, putting the stock 218.1% above its annual trough. Recent trading volume was 215K shares, suggesting relatively thin trading activity.
Is KLAC Overvalued or Undervalued? — Valuation Analysis
KLA CORP (KLAC) carries a value factor score of 40/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 48.57x, compared to the Technology sector average of 45.27x — a premium of 7%. The price-to-book ratio stands at 37.14x, versus the sector average of 3.16x. The price-to-sales ratio is 16.05x, compared to 1.06x for the average Technology stock. On an enterprise value basis, KLAC trades at 42.84x EV/EBITDA, versus 12.79x for the sector. The EV/EBIT multiple is 36.33x.
Overall, KLAC's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
KLA CORP Profitability — ROE, Margins, and Quality Score
KLA CORP (KLAC) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 76.5%, compared to the Technology sector average of -1.4%, which demonstrates strong shareholder value creation. Return on assets (ROA) comes in at 25.0% versus the sector average of -1.0%.
On a margin basis, KLA CORP reports gross margins of 61.2%, compared to 50.9% for the sector. The operating margin is 38.5% (sector: -0.5%). Net profit margin stands at 33.0%, versus -1.5% for the average Technology stock. Revenue growth is running at 16.0% on a trailing basis, compared to 14.2% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
KLAC Debt, Balance Sheet, and Financial Health
KLA CORP has a debt-to-equity ratio of 108.0%, compared to the Technology sector average of 43.0%. Leverage is within a manageable range for the industry, though investors should monitor debt trends over time. The current ratio is 2.83x, indicating strong short-term liquidity. Total debt on the balance sheet is $5.89B.
KLAC has a beta of 1.77, meaning it is more volatile than the broader market — a $10,000 investment in KLAC would be expected to move 76.7% more than the S&P 500 on any given day. The stability factor score for KLA CORP is 48/100, reflecting average volatility within the normal range for its sector.
KLA CORP Revenue and Earnings History — Quarterly Trend
In TTM 2026, KLA CORP reported revenue of $12.65B and earnings per share (EPS) of $8.73. Net income for the quarter was $4.18B. Gross margin was 61.2%. Operating income came in at $4.88B.
In Q2 2026, KLA CORP reported revenue of $3.30B and earnings per share (EPS) of $8.73. Net income for the quarter was $1.15B. Gross margin was 61.5%. Revenue grew 7.2% year-over-year compared to Q2 2025. Operating income came in at $1.33B.
In Q1 2026, KLA CORP reported revenue of $3.21B and earnings per share (EPS) of $8.51. Net income for the quarter was $1.12B. Gross margin was 61.3%. Revenue grew 13.0% year-over-year compared to Q1 2025. Operating income came in at $1.31B.
In FY 2025, KLA CORP reported revenue of $12.16B and earnings per share (EPS) of $30.53. Net income for the quarter was $4.06B. Gross margin was 60.9%. Revenue grew 23.9% year-over-year compared to FY 2024. Operating income came in at $4.64B.
Over the past 8 quarters, KLA CORP has demonstrated a growth trajectory, with revenue expanding from $9.81B to $12.65B. Investors analyzing KLAC stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
KLAC Dividend Yield and Income Analysis
KLA CORP (KLAC) currently pays a dividend yield of 0.6%. At this yield, a $10,000 investment in KLAC stock would generate approximately $$61.00 in annual dividend income. With a net margin of 33.0%, the dividend appears well-covered by earnings, suggesting sustainable payouts going forward.
KLAC Momentum and Technical Analysis Profile
KLA CORP (KLAC) has a momentum factor score of 70/100, indicating strong price momentum with the stock outperforming the majority of the market over recent periods. Stocks with high momentum scores have historically tended to continue their outperformance in the near term. The investment factor score is 27/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 22/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
KLAC vs Competitors — Technology Sector Ranking and Peer Comparison
Comparing KLAC against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full KLAC vs S&P 500 (SPY) comparison to assess how KLA CORP stacks up against the broader market across all factor dimensions.
KLAC Next Earnings Date
No upcoming earnings date has been announced for KLA CORP (KLAC) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy KLAC? — Investment Thesis Summary
KLA CORP presents a balanced picture with arguments on both sides. Price momentum is positive at 70/100, suggesting the trend favors buyers.
In summary, KLA CORP (KLAC) earns a Hold rating with a composite score of 48.1/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on KLAC stock.
We'll email you when stocks you follow change their composite rating.
Institutional Research Dossier
KLA CORP (KLAC) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
We maintain our Hold rating on KLA Corporation. While the company exhibits strong profitability and operates in a critical segment of the semiconductor industry, its current valuation appears stretched, particularly when compared to sector peers. The high P/E and EV/EBITDA multiples suggest that much of the company's future growth is already priced into the stock, limiting potential upside in the near term.
KLA's dominant position in process control and yield management provides a solid foundation, but the cyclical nature of the semiconductor industry and the potential for increased competition pose risks. The company's high debt levels also warrant caution. Therefore, while KLA is a well-managed company with attractive fundamentals, we believe a Hold rating is appropriate given the current risk/reward profile.
Business Strategy & Overview
KLA Corporation operates within the semiconductor capital equipment industry, specifically focusing on process control and yield management solutions. Its core business revolves around designing, manufacturing, and marketing equipment and software used by semiconductor manufacturers to identify and correct defects during the chip fabrication process. This includes defect inspection and review systems, metrology solutions, in-situ process monitoring products, computational lithography software, and data analytics systems. These solutions are crucial for chip manufacturers to improve yield, reduce costs, and ensure the quality and reliability of their products.
The company's strategic positioning is centered on maintaining its leadership in process control. KLA invests heavily in research and development to stay ahead of technological advancements in semiconductor manufacturing. As chip geometries shrink and manufacturing processes become more complex, the need for advanced process control solutions increases, creating a growing demand for KLA's products. The company also focuses on expanding its product portfolio to address emerging areas such as advanced packaging and compound semiconductors.
KLA's revenue model is primarily based on the sale of its equipment and software, as well as providing services such as installation, training, and maintenance. The company generates revenue from a diverse customer base, including leading semiconductor manufacturers, foundries, and memory chip producers. The geographic distribution of its revenue reflects the global nature of the semiconductor industry, with significant contributions from Asia, North America, and Europe.
The semiconductor industry is characterized by cyclicality, driven by fluctuations in demand for electronic devices and changes in capital spending by chip manufacturers. KLA's business is therefore subject to these cyclical trends. However, the increasing complexity of semiconductor manufacturing and the growing importance of process control solutions provide a degree of resilience to the company's revenue stream. Furthermore, KLA's strong market position and technological leadership enable it to capture a significant share of the available market.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
16.0%
Sector: 14.2%
+13% VS SCTR
Economic Moat Analysis
KLA possesses a narrow economic moat, primarily derived from its intangible assets and switching costs. The company's deep technological expertise and proprietary knowledge in process control and yield management create a significant barrier to entry for potential competitors. Developing and manufacturing advanced inspection and metrology equipment requires substantial investment in research and development, as well as a deep understanding of semiconductor manufacturing processes. KLA's decades of experience and established track record provide a competitive advantage that is difficult to replicate.
Switching costs also contribute to KLA's moat. Semiconductor manufacturers invest significant time and resources in integrating KLA's equipment and software into their production lines. Once these systems are in place, switching to a competitor's solution would involve significant disruption and retraining costs. This creates a degree of customer stickiness that protects KLA's market share.
However, the moat is not wide due to the presence of established competitors and the potential for technological disruption. Companies like Applied Materials and ASML also offer process control solutions, and while KLA holds a leading position in certain segments, the overall market is competitive. Furthermore, advancements in artificial intelligence and machine learning could potentially lead to the development of new and more efficient process control techniques, which could erode KLA's competitive advantage if the company fails to adapt.
The semiconductor industry is constantly evolving, and KLA must continue to innovate and invest in research and development to maintain its technological edge. Failure to do so could result in a loss of market share and a weakening of its moat. While the company's current market position and customer relationships provide a degree of protection, the long-term sustainability of its moat depends on its ability to stay ahead of the competition and adapt to changing industry dynamics.
Financial Health & Profitability
KLA's financial health appears robust, characterized by strong profitability and cash flow generation. The company's gross margin of 61.2% and operating margin of 38.5% significantly exceed the sector averages of 51.2% and -0.5%, respectively, indicating efficient operations and pricing power. The net margin of 33.0% further underscores the company's ability to convert revenue into profit.
The company's revenue growth of 16.0% is also slightly above the sector average of 14.0%, demonstrating its ability to capture market share and benefit from the growth in the semiconductor industry. However, it's important to note the cyclical nature of the semiconductor industry, which can lead to fluctuations in revenue and profitability. The quarterly financial history shows some variability in revenue and net income, reflecting these cyclical trends.
KLA's return on equity (ROE) of 76.5% is exceptionally high, indicating efficient use of shareholder equity to generate profits. This is significantly higher than the sector average of -1.5%, highlighting KLA's superior profitability. The company's free cash flow of $4.20 billion demonstrates its ability to generate cash from its operations, which can be used for investments, acquisitions, or returning capital to shareholders.
The company's balance sheet shows a debt-to-equity ratio of 108.00, which is higher than the sector average of 43.00. This indicates a higher level of leverage, which could increase financial risk. However, the current ratio of 2.83 suggests that the company has sufficient liquid assets to cover its short-term liabilities. The company's ability to generate strong cash flow provides some comfort regarding its ability to manage its debt obligations. Overall, KLA's financial health is strong, but the high level of debt warrants monitoring.
Valuation Assessment
KLA's valuation appears stretched based on several key metrics. The company's P/E ratio of 171.7x is significantly higher than the sector average of 45.3x, suggesting that the stock is trading at a premium to its earnings. Similarly, the EV/EBITDA multiple of 38.0x is considerably higher than the sector average of 13.0x, indicating that the company is expensive relative to its earnings before interest, taxes, depreciation, and amortization.
While KLA's strong growth and profitability justify a premium valuation to some extent, the magnitude of the premium appears excessive. The high multiples suggest that much of the company's future growth is already priced into the stock, limiting potential upside in the near term. Furthermore, the cyclical nature of the semiconductor industry adds to the risk of a potential valuation correction if growth slows down.
A discounted cash flow (DCF) analysis would be necessary to determine a more precise fair value for the stock. However, based on the available data and the high multiples, it appears that KLA is currently overvalued. Investors should exercise caution and consider the potential for a valuation pullback before investing in the stock.
The company's strong free cash flow generation is a positive factor, but it is not sufficient to justify the current high valuation. The market may be anticipating continued strong growth in the semiconductor industry and KLA's ability to maintain its market leadership. However, any disappointment in these expectations could lead to a significant decline in the stock price. Therefore, we believe that KLA is currently trading at a premium and a Hold rating is warranted.
Risk & Uncertainty
KLA faces several risks and uncertainties that could impact its future performance. The cyclical nature of the semiconductor industry is a significant risk factor. Demand for semiconductors fluctuates based on macroeconomic conditions and changes in consumer electronics demand, which can lead to volatility in KLA's revenue and profitability. A slowdown in the global economy or a decline in demand for electronic devices could negatively impact the company's financial results.
Competition is another key risk. While KLA holds a leading position in process control, it faces competition from other established players such as Applied Materials and ASML. These companies are also investing heavily in research and development, and they could potentially develop competing solutions that erode KLA's market share. Furthermore, the emergence of new technologies or disruptive innovations could create new competitive threats.
Customer concentration is also a concern. KLA relies on a relatively small number of large semiconductor manufacturers for a significant portion of its revenue. The loss of one or more of these key customers could have a material adverse effect on the company's financial performance. Furthermore, changes in customer spending patterns or investment priorities could also impact KLA's revenue.
The company's high level of debt is another risk factor. While KLA generates strong cash flow, its debt-to-equity ratio of 108.00 indicates a significant amount of leverage. This could increase financial risk and limit the company's flexibility to invest in growth opportunities or return capital to shareholders. Rising interest rates could also increase the company's borrowing costs and further strain its financial resources.
Bulls Say / Bears Say
The Bull Case
BULL VIEWKLA's dominant market share in process control and yield management, coupled with the increasing complexity of semiconductor manufacturing, ensures continued strong demand for its products and services.
BULL VIEWThe company's consistent innovation and investment in R&D will allow it to maintain its technological lead and capture a disproportionate share of the growing semiconductor capital equipment market.
The Bear Case
BEAR VIEWKLA's high valuation multiples leave little room for error, and any slowdown in semiconductor demand or increased competition could trigger a significant correction in the stock price.
BEAR VIEWThe company's high debt levels and cyclical exposure make it vulnerable to macroeconomic downturns and fluctuations in capital spending by semiconductor manufacturers.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score KLAC and 4,400+ other equities.
KLA CORP exhibits a 683% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
25.0%
Sector: -1.0%
Gross Margin
Pricing power and cost efficiency
61.2%
Sector: 50.9%
Operating Margin
Core business profitability
38.5%
Sector: -0.5%
Net Margin
Bottom-line profitability
33.0%
Sector: -1.5%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield0.00%
Yield Delta—
Income Projection audit
A $10,000 investment would generate approximately $61 annually in dividends at the current trailing rate.
