# KLA (KLAC.US)

Canonical: https://gigainvestors.com/s/KLAC

Analysis as of: 2026-10-16T07:29:38.147Z. Financial observations: FY1997–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $174.46 per share; close as of 2026-10-15.

Estimated value: low $54.70 per share, central $78.17 per share, high $91.26 per share. Buy at or below the central value $78.17 per share. Valuation as of 2026-10-16T07:29:38.147Z; scenarios are not confidence intervals.

Expected annual return: 6.2% at the stated quote. About 6.2% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 1 revenue decline in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.10×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.37×

- FY2018: 0.38×

- FY2019: 0.30×

- FY2020: 0.30×

- FY2021: 0.36×

- FY2022: 0.40×

- FY2023: 0.38×

- FY2024: 0.37×

- FY2025: 0.41×

- FY2026: 0.42×

### moat: pass

- ROIC, median of available years: 94.1%

- ROIC, second-lowest year: 73.5%

- Typical minus recent gross margin: -0.5 pp

- Typical gross margin (annual median): 60.4%

- Recent gross margin (lower of latest and 3-year median): 60.9%

- Years with nonpositive capital: 0

- Capital spending / revenue: 2.8%

- ROIC including acquisitions, ten-year median: 59.0%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: >100%

- FY2018: >100%

- FY2019: 59.1%

- FY2020: 73.5%

- FY2021: 90.6%

- FY2022: >100%

- FY2023: >100%

- FY2024: 85.8%

- FY2025: 97.6%

- FY2026: 84.0%

### economics: pass

- Owner earnings / net income, 5-yr: 1.01×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $19B

- Net income, five-year total: $18B

- Return on incremental invested capital: 89.6%

- Working capital / revenue, annual change: 1.1 pp

- Working capital / revenue, change between three-year averages: 7.0 pp

- Working capital / revenue, final three-year average: 45.4%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.02×

- FY2023: 1.02×

- FY2024: 1.05×

- FY2025: 1.01×

- FY2026: 0.98×

### management: pass

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 113.1% vs 85.8%

- Per-share earnings: 0.51 to 3.04 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -1.7%

- Ordinary dilution, 5-year annual growth: -3.2%

- Market cap gain: $380B

- Cumulative retained earnings: $2.8B

- Diluted shares, 10-year annual growth: -1.7%

- Diluted shares, 5-year annual growth: -3.2%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 25.0%

- Per-share value change: $2.53

- Per-share value, starting three-year median: $0.51

- Per-share value, ending three-year median: $3.04

- Buybacks concentrated in cheaper years (correlation): 0.22

- Average buyback yield: 2.2%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $3.8B

- Cumulative net income, 10 years: $25B

- ROIC, first three-year median: >100%

- ROIC, last three-year median: 85.8%

Chart: Earnings per share; fiscal year observations.

- FY2017: $0.59

- FY2018: $0.51

- FY2019: $0.75

- FY2020: $0.77

- FY2021: $1.34

- FY2022: $2.19

- FY2023: $2.42

- FY2024: $2.03

- FY2025: $3.04

- FY2026: $3.66

### accounting: pass

- Sloan accruals: 3.8%

- Receivables to sales index (DSRI): 1.17×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 7.5%

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.86×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.32×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -2.8%

- FY2018: -7.6%

- FY2019: 0.3%

- FY2020: -6.1%

- FY2021: -1.0%

- FY2022: 0.1%

- FY2023: -2.0%

- FY2024: -3.5%

- FY2025: -0.1%

- FY2026: 3.8%

## Holders

- [Allen Bond](https://gigainvestors.com/JIM): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Robert Torray](https://gigainvestors.com/T): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Lee Ainslie](https://gigainvestors.com/mc): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 42% since Jun 2026 · "KLA Corp posts Q4 beat, shares tumble amid underwhelming guidance" (finance.yahoo.com, Jul 2026) · sales +11.7%

Story as of 2026-10-16T09:59:01.101Z; price observation 2026-10-15.

Price needs cash profits to grow 17.9% a year for ten years

- 2025-10-30: KLAC Q3 Deep Dive: AI, Advanced Packaging, and Process Control Drive Growth and Guidance ([finance.yahoo.com](https://finance.yahoo.com/news/klac-q3-deep-dive-ai-131620748.html))

- 2026-01-27: KLA Benefits From Growing AI Infrastructure Demand: What's Ahead? ([finance.yahoo.com](https://finance.yahoo.com/news/kla-benefits-growing-ai-infrastructure-164100304.html))

- 2026-04-29: KLA Corp forecasts strong quarterly revenue on AI-linked demand ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/kla-corp-forecasts-strong-quarterly-204021874.html))

- 2026-05-26: KLA Flags Stronger Chip Equipment Demand, Rare 2027 Visibility at JPMorgan Conference ([finance.yahoo.com](https://finance.yahoo.com/sectors/technology/articles/kla-flags-stronger-chip-equipment-090247404.html))

- 2026-06-19: KLA Pops on Hyperscaler Demand, Institutional Support ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/kla-pops-hyperscaler-demand-institutional-124036930.html))

- 2026-07-28: KLA Corp posts Q4 beat, shares tumble amid underwhelming guidance ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/kla-corp-posts-q4-beat-205131915.html))

### Sales · FY2025–2026

sales +11.7%; source https://www.sec.gov/Archives/edgar/data/319201/000031920126000027/klac-20260630.htm; observed 2026-08-06.

- FY2017: $3.5B 

- FY2018: $4.0B 

- FY2019: $4.6B 

- FY2020: $5.8B 

- FY2021: $6.9B 

- FY2022: $9.2B 

- FY2023: $10B 

- FY2024: $9.8B 

- FY2025: $12B 

- FY2026: $14B 

### Gross margin · FY2026

gross margin 61.3%; source https://www.sec.gov/Archives/edgar/data/319201/000031920126000027/klac-20260630.htm; observed 2026-08-06.

- FY2017: 63.0% 

- FY2018: 64.1% 

- FY2019: 59.1% 

- FY2020: 57.8% 

- FY2021: 59.9% 

- FY2022: 61.0% 

- FY2023: 59.8% 

- FY2024: 60.0% 

- FY2025: 60.9% 

- FY2026: 61.3% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in semiconductor equipment & materials; annual sales are USD 13.6 billion.

- Source: https://www.sec.gov/Archives/edgar/data/319201/000031920126000027/klac-20260630.htm (filed 2026-08-06); FY2026: revenue 13579476000; grossProfit 8324416000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); KLAC.US: KLA Corporation, together with its subsidiaries, provides process control and process-enabling solutions for manufacturing wafers, reticles/masks, chemicals/materials, integrated circuits (ICs), packaged ICs, and printed circuit boards. It operates through three segments: Semiconductor Process Control; Specialty Semiconductor Process; and PCB and Component Inspection. The company offers inspection and review tools to identify, locate, characterize, review, and analyze defects on various surfaces of patterned and unpatterned wafers; chemical process control equipment; wired and wireless sensor wafers and reticles; wafer defect inspection, review, and metrology systems; reticle inspection and metrology systems; wafer inspection and metrology systems; semiconductor software solutions; KLA Pro systems; and specialty semiconductor manufacturing, benchtop metrology, surface characterization, material strength characterization, and electrical property measurement products. It also provides etch, plasma dicing, deposition and other wafer processing technologies and solutions; direct imaging, inspection, optical shaping, inkjet, and additive printing, as well as computer-aided manufacturing and engineering solutions; and components. In addition, the company offers service programs. It serves semiconductor, and semiconductor-related and electronic device manufacturers. The company operates in China, Taiwan, Korea, North America, Japan, Europe, Israel, and rest of Asia. 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.

### Why customers stay

Margins ranged from 60% to 61.3% during 2024–26; it earns 94.1% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2024: grossProfit / revenue = 60%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2025: grossProfit / revenue = 60.9%.

- Source: https://www.sec.gov/Archives/edgar/data/319201/000031920126000027/klac-20260630.htm (filed 2026-08-06); FY2026: grossProfit / revenue = 61.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); 10-year return on capital observations [[2017,1.1311246149366174],[2018,1.5462718049348174],[2019,0.5909446650029284],[2020,0.7346971822882276],[2021,0.9058340879503353],[2022,1.1053190609971315],[2023,1.0318290465424398],[2024,0.8581031262536144],[2025,0.9757676018207005],[2026,0.8395409406212463]]; median 0.9408008448855179. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 61% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/319201/000031920126000027/klac-20260630.htm (filed 2026-08-06); Gross margin observations: [[2021,0.5993248186734741],[2022,0.6100209913651747],[2023,0.5981055169675161]]; range within 2 percentage points.

### Where the cash goes

Spends 3.4% of cash earnings on expansion; earns 89.6% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2017: growth capex 0; upkeep 38594000; owner earnings 945318000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2018: growth capex 4263000; upkeep 62684000; owner earnings 802265000. Growth capex / owner earnings = 0.005313705571101818.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2019: growth capex 0; upkeep 130498000; owner earnings 1278343000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2020: growth capex 0; upkeep 152675000; owner earnings 1412159000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2021: growth capex 0; upkeep 231627000; owner earnings 2180000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2022: growth capex 0; upkeep 307320000; owner earnings 3377831000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2023: growth capex 0; upkeep 341591000; owner earnings 3460799000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2024: growth capex 0; upkeep 277384000; owner earnings 2886242000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2025: growth capex 0; upkeep 340209000; owner earnings 4115522000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/319201/000031920126000027/klac-20260630.htm (filed 2026-08-06); FY2026: growth capex 161019229.44057745; upkeep 214925770.55942255; owner earnings 4714451229.4405775. Growth capex / owner earnings = 0.03415439498770341.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); Incremental return on capital 0.8960220742116739, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); Dividend observations: [[2017,343993000],[2018,402065000],[2019,472263000],[2020,522421000],[2021,559353000],[2022,157602000],[2023,179510000],[2024,773041000],[2025,904594000],[2026,1057832000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/319201/000031920126000027/klac-20260630.htm (filed 2026-08-06); FY2026: cash repurchases 2289769000 USD.

### Are managers owners

Insiders own 0.1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); KLAC.US SharesStats.PercentInsiders = 0.11399999999999999 percentage points; cache date 2026-10-16.

### What could break it

"We are exposed to risks associated with a highly concentrated customer base." (SEC filing, Aug 2026)

- Source: https://www.sec.gov/Archives/edgar/data/319201/000031920126000027/klac-20260630.htm (filed 2026-08-06); We are exposed to risks associated with a highly concentrated customer base.

### What the price says

The price assumes cash profits grow 17.9% yearly over ten years; actual growth was 22.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); Ten-year compound average after fade. Initial solved rate 0.3370357540095681. Price 174.46; FX 1; discount 0.1; same compounder ten-year fade to terminal 0.03. FY2016 owner earnings/share 0.47175514577845246 → FY2026 3.572547238088603. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-11: $7.98 per share

- 2016-12: $7.87 per share

- 2017-01: $8.51 per share

- 2017-02: $9.01 per share

- 2017-03: $9.51 per share

- 2017-04: $9.82 per share

- 2017-05: $10.40 per share

- 2017-06: $9.15 per share

- 2017-07: $9.26 per share

- 2017-08: $9.37 per share

- 2017-09: $10.60 per share

- 2017-10: $10.89 per share

- 2017-11: $10.22 per share

- 2017-12: $10.51 per share

- 2018-01: $10.98 per share

- 2018-02: $11.33 per share

- 2018-03: $10.90 per share

- 2018-04: $10.17 per share

- 2018-05: $11.32 per share

- 2018-06: $10.25 per share

- 2018-07: $11.74 per share

- 2018-08: $11.62 per share

- 2018-09: $10.17 per share

- 2018-10: $9.15 per share

- 2018-11: $9.86 per share

- 2018-12: $8.95 per share

- 2019-01: $10.66 per share

- 2019-02: $11.55 per share

- 2019-03: $11.94 per share

- 2019-04: $12.75 per share

- 2019-05: $10.31 per share

- 2019-06: $11.82 per share

- 2019-07: $13.63 per share

- 2019-08: $14.79 per share

- 2019-09: $15.94 per share

- 2019-10: $16.90 per share

- 2019-11: $16.39 per share

- 2019-12: $17.82 per share

- 2020-01: $16.57 per share

- 2020-02: $15.37 per share

- 2020-03: $14.37 per share

- 2020-04: $16.41 per share

- 2020-05: $17.60 per share

- 2020-06: $19.45 per share

- 2020-07: $19.98 per share

- 2020-08: $20.51 per share

- 2020-09: $19.37 per share

- 2020-10: $19.72 per share

- 2020-11: $25.20 per share

- 2020-12: $25.89 per share

- 2021-01: $28.01 per share

- 2021-02: $31.12 per share

- 2021-03: $33.04 per share

- 2021-04: $31.53 per share

- 2021-05: $31.69 per share

- 2021-06: $32.42 per share

- 2021-07: $34.82 per share

- 2021-08: $34.00 per share

- 2021-09: $33.45 per share

- 2021-10: $37.28 per share

- 2021-11: $40.81 per share

- 2021-12: $43.01 per share

- 2022-01: $38.93 per share

- 2022-02: $34.85 per share

- 2022-03: $36.61 per share

- 2022-04: $31.93 per share

- 2022-05: $36.49 per share

- 2022-06: $31.91 per share

- 2022-07: $38.35 per share

- 2022-08: $34.41 per share

- 2022-09: $30.26 per share

- 2022-10: $31.65 per share

- 2022-11: $39.31 per share

- 2022-12: $37.70 per share

- 2023-01: $39.25 per share

- 2023-02: $37.94 per share

- 2023-03: $39.92 per share

- 2023-04: $38.65 per share

- 2023-05: $44.30 per share

- 2023-06: $48.50 per share

- 2023-07: $51.40 per share

- 2023-08: $50.19 per share

- 2023-09: $45.87 per share

- 2023-10: $46.97 per share

- 2023-11: $54.46 per share

- 2023-12: $58.13 per share

- 2024-01: $59.40 per share

- 2024-02: $68.23 per share

- 2024-03: $69.86 per share

- 2024-04: $68.93 per share

- 2024-05: $75.95 per share

- 2024-06: $82.45 per share

- 2024-07: $82.31 per share

- 2024-08: $81.94 per share

- 2024-09: $77.44 per share

- 2024-10: $66.62 per share

- 2024-11: $64.70 per share

- 2024-12: $63.01 per share

- 2025-01: $73.82 per share

- 2025-02: $70.88 per share

- 2025-03: $67.98 per share

- 2025-04: $70.27 per share

- 2025-05: $75.69 per share

- 2025-06: $89.57 per share

- 2025-07: $87.90 per share

- 2025-08: $87.20 per share

- 2025-09: $107.86 per share

- 2025-10: $120.87 per share

- 2025-11: $117.55 per share

- 2025-12: $121.51 per share

- 2026-01: $142.79 per share

- 2026-02: $152.46 per share

- 2026-03: $147.24 per share

- 2026-04: $175.04 per share

- 2026-05: $192.17 per share

- 2026-06: $301.71 per share

- 2026-07: $182.82 per share

- 2026-08: $175.45 per share

- 2026-09: $194.93 per share

- 2026-10: $184.00 per share

## Annual estimated value (USD per share)

- FY2017: low $6.80 per share, central $7.48 per share, high $8.39 per share

- FY2018: low $8.43 per share, central $10.64 per share, high $12.15 per share

- FY2019: low $10.21 per share, central $13.25 per share, high $15.33 per share

- FY2020: low $14.40 per share, central $20.47 per share, high $23.85 per share

- FY2021: low $18.18 per share, central $24.60 per share, high $28.59 per share

- FY2022: low $26.36 per share, central $37.69 per share, high $44.01 per share

- FY2023: low $36.41 per share, central $52.12 per share, high $60.88 per share

- FY2024: low $36.13 per share, central $51.25 per share, high $59.69 per share

- FY2025: low $46.69 per share, central $66.66 per share, high $77.79 per share

- FY2026: low $54.10 per share, central $77.31 per share, high $90.25 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/319201/000031920126000027/klac-20260630.htm); period 2026-06-30, filed 2026-08-06.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.