KLA Stock To $1492?
KLA (KLAC) stock has jumped 12% during the past week, and is currently trading at $1,147.43. Our machine-driven multi-factor assessment suggests that it may be time to buy more shares of KLAC stock. We have, overall, a positive view of the stock, and a price of $1492 may not be out of reach. We believe there is nothing to fear in KLAC stock given its overall Very Strong operating performance and financial condition. Hence, despite its Very High valuation, the stock appears Attractive but Volatile.
Below is our assessment:
| CONCLUSION | |
|---|---|
| What you pay: | |
| Valuation | Very High |
| What you get: | |
| Growth | Very Strong |
| Profitability | Very Strong |
| Financial Stability | Very Strong |
| Downturn Resilience | Moderate |
| Operating Performance | Very Strong |
| Stock Opinion | Attractive but Volatile |
KLAC stock has jumped meaningfully recently and we currently find it attractive but volatile. While this may feel like an opportunity, there is significant risk in relying on a single stock. On the other hand, there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. Separately, consider what could long-term performance for your portfolio be if you combined 10% commodities, 10% gold, and 2% crypto with equities.
Let’s get into details of each of the assessed factors but before that, for quick background: With $152 Bil in market cap, KLA provides process control and yield management solutions for semiconductor industries, including defect inspection, metrology, process monitoring, computational lithography software, and data analytics systems.
[1] Valuation Looks Very High
| KLAC | S&P 500 | |
|---|---|---|
| Price-to-Sales Ratio | 12.5 | 3.2 |
| Price-to-Earnings Ratio | 37.3 | 24.2 |
| Price-to-Free Cash Flow Ratio | 40.5 | 21.0 |
This table highlights how KLAC is valued vs broader market. For more details see: KLAC Valuation Ratios
[2] Growth Is Very Strong
- KLA has seen its top line grow at an average rate of 10.4% over the last 3 years
- Its revenues have grown 24% from $9.8 Bil to $12 Bil in the last 12 months
- Also, its quarterly revenues grew 23.6% to $3.2 Bil in the most recent quarter from $2.6 Bil a year ago.
| KLAC | S&P 500 | |
|---|---|---|
| 3-Year Average | 10.4% | 5.4% |
| Latest Twelve Months* | 23.9% | 5.2% |
| Most Recent Quarter (YoY)* | 23.6% | 6.1% |
This table highlights how KLAC is growing vs broader market. For more details see: KLAC Revenue Comparison
[3] Profitability Appears Very Strong
- KLAC last 12 month operating income was $5.0 Bil representing operating margin of 41.2%
- With cash flow margin of 33.6%, it generated nearly $4.1 Bil in operating cash flow over this period
- For the same period, KLAC generated nearly $4.1 Bil in net income, suggesting net margin of about 33.4%
| KLAC | S&P 500 | |
|---|---|---|
| Current Operating Margin | 41.2% | 18.6% |
| Current OCF Margin | 33.6% | 20.4% |
| Current Net Income Margin | 33.4% | 12.7% |
This table highlights how KLAC profitability vs broader market. For more details see: KLAC Operating Income Comparison
[4] Financial Stability Looks Very Strong
- KLAC Debt was $6.1 Bil at the end of the most recent quarter, while its current Market Cap is $152 Bil. This implies Debt-to-Equity Ratio of 4.0%
- KLAC Cash (including cash equivalents) makes up $4.5 Bil of $16 Bil in total Assets. This yields a Cash-to-Assets Ratio of 28.0%
| KLAC | S&P 500 | |
|---|---|---|
| Current Debt-to-Equity Ratio | 4.0% | 21.1% |
| Current Cash-to-Assets Ratio | 28.0% | 7.0% |
[5] Downturn Resilience Is Moderate
KLAC saw an impact slightly worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
2022 Inflation Shock
- KLAC stock fell 40.8% from a high of $445.00 on 14 January 2022 to $263.22 on 17 October 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 26 May 2023
- Since then, the stock increased to a high of $1,152.88 on 20 October 2025 , and currently trades at $1,147.43
| KLAC | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -40.8% | -25.4% |
| Time to Full Recovery | 221 days | 464 days |
2020 Covid Pandemic
- KLAC stock fell 37.5% from a high of $182.57 on 2 January 2020 to $114.02 on 20 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 3 June 2020
| KLAC | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -37.5% | -33.9% |
| Time to Full Recovery | 75 days | 148 days |
2008 Global Financial Crisis
- KLAC stock fell 75.6% from a high of $62.46 on 19 July 2007 to $15.24 on 19 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 14 October 2013
| KLAC | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -75.6% | -56.8% |
| Time to Full Recovery | 1790 days | 1480 days |
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read KLAC Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – S&P 500, Russell, and S&P midcap. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.