Stock of the Day

February 9, 2022

KLA (KLAC)

$754.30
-$23.33 (-3.0%)
Market Cap: $103.34B

About KLA

KLA Corporation, together with its subsidiaries, engages in the design, manufacture, and marketing of process control, process-enabling, and yield management solutions for the semiconductor and related electronics industries worldwide. 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; metrology systems that are used to measure pattern dimensions, film thickness, film stress, layer-to-layer alignment, pattern placement, surface topography, and electro-optical properties for wafers; chemical process control equipment; wired and wireless sensor wafers and reticles; wafer defect inspection, review, and metrology systems; reticle inspection and metrology systems; and semiconductor software solutions that provide run-time process control, defect excursion identification, process corrections, and defect classification to accelerate yield learning rates and reduce production risk. It also provides etch, plasma dicing, deposition, and other wafer processing technologies and solutions for the semiconductor and microelectronics industry. In addition, the company offers direct imaging, inspection, optical shaping, inkjet and additive printing, UV laser drilling, and computer-aided manufacturing and engineering solutions for the PCB market; inspection and electrical testing systems to identify and classify defects, as well as systems to repair defects for the display market; and inspection and metrology systems for quality control and yield improvement in advanced and traditional semiconductor packaging markets. 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 Bull Case

Here are some ways that investors could benefit from investing in KLA Co.:

  • KLA Co. has received multiple upgrades from analysts, with Oppenheimer raising its rating to "outperform" and increasing the price target to $850. This indicates strong confidence in the company's future performance.
  • The stock currently trades at $750.74, which is significantly below its 1-year high of $896.32, suggesting potential for price appreciation as the market recognizes its value.
  • Institutional investors own 86.65% of KLA Co.'s stock, reflecting strong institutional confidence and stability in the company's financial health.
  • Recent reports indicate a consensus rating of "Moderate Buy" among analysts, with an average price target of $831.68, suggesting that many believe the stock is undervalued at its current price.
  • KLA Co. operates in the semiconductor industry, which is experiencing robust growth due to increasing demand for advanced technology, positioning the company well for future revenue growth.

KLA Bear Case

Investors should be bearish about investing in KLA Co. for these reasons:

  • The stock has recently experienced a decline of 1.8%, which may indicate short-term volatility and uncertainty in the market.
  • KLA Co. has a relatively high P/E ratio of 31.57, which could suggest that the stock is overvalued compared to its earnings, making it a riskier investment.
  • Despite strong institutional ownership, the market can be unpredictable, and any negative news or earnings reports could lead to significant price drops.
  • The semiconductor industry is highly competitive and subject to rapid technological changes, which could impact KLA Co.'s market position and profitability.
  • Recent trading volumes have been lower than average, which may indicate reduced investor interest or liquidity issues, potentially making it harder to sell shares without affecting the price.

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