KLA (KLAC) closed at $1,114.32 in the latest trading session, marking a -2.89% move from the prior day. This change lagged the S&P 500's daily loss of 0.53%. Elsewhere, the Dow saw a downswing of 0.71%, while the tech-heavy Nasdaq depreciated by 0.93%.
The stock of maker of equipment for manufacturing semiconductors has risen by 7.12% in the past month, leading the Computer and Technology sector's gain of 1.25% and the S&P 500's gain of 1.13%.
Analysts and investors alike will be keeping a close eye on the performance of KLA in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $8.55, reflecting a 16.64% increase from the same quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $3.16 billion, indicating a 11.04% upward movement from the same quarter last year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $34.83 per share and revenue of $12.9 billion, which would represent changes of +4.66% and +6.14%, respectively, from the prior year.
Any recent changes to analyst estimates for KLA should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.33% higher within the past month. KLA currently has a Zacks Rank of #2 (Buy).
Digging into valuation, KLA currently has a Forward P/E ratio of 32.94. For comparison, its industry has an average Forward P/E of 22.8, which means KLA is trading at a premium to the group.
It's also important to note that KLAC currently trades at a PEG ratio of 3.31. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As the market closed yesterday, the Electronics - Miscellaneous Products industry was having an average PEG ratio of 2.08.
The Electronics - Miscellaneous Products industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 51, placing it within the top 21% of over 250 industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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KLA Corporation (KLAC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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