* Note: Prices are in Million (M) USD.
Description:
KLA Corporation is a capital equipment company based in Milpitas, California. It supplies process control and yield management systems for the semiconductor industry and other related nanoelectronics industries. The company's products and services are intended for all phases of wafer, reticle, integrated circuit (IC) and packaging production, from research and development to final volume manufacturing.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $2,079 M
Debt : $5,884 M
EBITDA : $5,411 M
Net Debt (Debt - Cash): $3,805 M
Since Net Debt is covered by EBITDA within 1 year, 3 points assigned.
This criteria used industry in which company operates:
Sector: Technology
Industry: Semiconductor equipment & materials
Based on sector, 5 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 24.13
Since Forward PE Ratio is between 20 - 25, 2 points assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 19 overlapping fiscal years (max 20).Average Free Cash Flow: $1,191 M
Average Revenue: $4,364 M
Revenue Converted To Free Cash Flow (%): 27.3%
Since Free Cash Flow (FCF) to Revenue percentage is greater than 25, 5 points assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2025-06-30): $12,156 M
Revenue 4 Years Ago (2021-06-30): $6,919 M
Last 5 Years Average Revenue Growth: 15%
Since Revenue Growth is between 15 - 20, 4 points assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2025-06-30): $134 M
Share Count 5 Years Ago (2021-06-30): $155 M
Company is buying back its own shares, 3 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $38.86
Trailing 12-Month Earnings Per Share (EPS): $35.24
Average Earnings Per Share (EPS): $37.05
Dividend Per Share (DPS): $7
Payout Ratio: 18%
Dividend Yield: 1%
Since company Payout Ratio is less than 50, 2 points assigned.
Since Dividend Yield is less than 1, 0 point assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 20 valid ROE years (max 20).Average ROE: 54.3%
Since Average ROE is greater than 20, 5 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $894
52-Week Low: $550
Threshold Price (15% Above 52-Week Low): $633
Since Current price is not within 15% threshold, 0 point assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $120,974 M
Since Market Cap is between 100B - 500B, 3 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 4% exposure of Total Portfolio.
Value-Trade has assigned 32 points to above KLA-Tencor Corporation (KLAC) stock.
Last 19 Years Avg PE 19.1, Fair Value PE 25, Industry Based PE 25, Growth Based PE 15, RCFC Based PE 31.84, ROE Based PE 50, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 26.15. Value-Trades has assined P/E value 26.15. Since an average (Current Year EPS + Next Year EPS) earning per share is $37.05.
The fair value of KLA-Tencor Corporation (KLAC) stock should be (26.15 x $37.05) = $968.72.
