KLAC
KLA Corporation$1524.55
Unclear
Target $1411.18
Report: Mar 07, 2026Technology • Semiconductors • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$1524.55-7.4%
Rec: UnclearConviction: High
Entry Target
$1085.52
(29% below current)
Fair Value
$1411.18
(7% below current)
Stop Loss
$1115.88
(27% below current)
Position Size
Half
Time Horizon
Long-Term (3+ Years)
Key Metrics
Live Snapshot
Market Data
52 Week High$1,693.35
52 Week Low$551.33
Avg. 3 Month Volume1.12M
Efficiency
LTM Gross Margin61.6%
LTM EBITDA Margin46.4%
LTM EBIT Margin43.3%
LTM Operating Margin43.3%
LTM ROA28.4%
LTM ROE95.2%
LTM ROIC40.4%
LTM ROCE46.7%
Capital Structure
Market Cap (MM)$193.0B
Enterprise Value (MM)$196.4B
Shares Outstanding131.28M
Total Debt (MM)$5.89B
Cash & Equivalents (MM)$2.45B
LTM Net Debt (MM)$3.43B
LTM Net Debt/EBITDA0.6x
Growth
TTM Rev. Growth17.5%
Last 3-Yr Rev. CAGR6.7%
Last 3-Yr EBITDA CAGR8.4%
Last 3-Yr EPS CAGR12.2%
Valuation
Street Target Price$1,696.31
LTM EV/Revenue15.4x
LTM EV/Gross Profit25.0x
LTM EV/EBIT35.6x
LTM EV/EBITDA33.2x
LTM P/E42.3x
LTM EV/FCF44.9x
LTM P/FCF44.1x
LTM P/TB13.2x
LTM P/B35.3x
Dividend Yield0.5%
Payout Ratio21.4%
Executive SummarySituation: Current price is $1524.55 versus fair value $1411.18 (-7.4% expected return), and valuation confidence is stable. Debate: Bull case depends on Advanced packaging revenue exceeds $1B FY2026, validating 70%+ YoY growth and $11B TAM capture amid AI ramp; addresses market margin fears by proving mix dilution transitory. Bear case centers on Moat erosion via tariff escalation (>100bps gross drag) and China export controls ($300-350M hit, revenue mix to <25%) compressing margins/pricing power. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
56-63% market share and switching costs yield 61.6% gross margins (+1030bps peer median) with 40.4% ROIC; AI/HBM drives 23.9% FY2025 growth and advanced packaging >70% YoY; $11.1B buybacks at 19.3% yield shrank shares 14.6%.
Bear Case
Rich 44.1x P/E and 46.0x P/FCF vs 5Y avgs 25.4x/26.0x; 50-100bps tariff drag and China 30-42% revenue expose to $300-350M export hit; op margin 43.3% trails 5Y 60.3% avg.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Advanced packaging revenue exceeds $1B FY2026, validating 70%+ YoY growth and $11B TAM capture amid AI ramp; addresses market margin fears b...
Mid-Term (6-18 months)Impact: High
KLA's process control leadership captures rising wafer complexity from AI/HBM, with 23.9% FY2025 revenue growth to $12.2B and service revenu...
Long-Term (18+ months)Impact: Moderate
Recent Q2 FY2026 record $3.3B revenue (+17% YoY) and $1.90 dividend hike (+31%) underscore compounding amid AI tailwinds.
Primary Risks
Concern: Medium
Moat erosion via tariff escalation (>100bps gross drag) and China export controls ($300-350M hit, revenue mix to <25%) compressing margins/p...
Concern: Medium
6.5% growth, 39% margins on China/tariff erosion; Bear DCF $1116/share.
Concern: Medium
Stewardship strong: 90% independent board with M&A experts (McMullen $2.7B Agilent deals, Peng $49B Xilinx exit); refreshed 30% in 2025 (Emb...
Recent Activity
2026-02-06SEC Filing (8-K)
+8.41%KLA Corporation declares $1.90 quarterly dividend payable March 3, 2026
2026-01-30SEC Filing (8-K)
-15.24%KLA Corporation reports Q2 FY2026 record results with strong guidance
2026-01-15Analyst Target
+7.70%Firm: Barclays Analyst: Tom O'Malley Price Target: $1,595.00 Price When Posted: $1,434.50 Implied Upside: +11.2%
2024-10-15Analyst Target
-14.70%Firm: Raymond James Analyst: Srini Pajjuri Price Target: $925.00 Price When Posted: $829.65 Implied Upside: +11.5%
2024-08-01SEC Filing (8-K)
-8.13%KLA Corporation declares $1.45 quarterly dividend payable September 3, 2024
Valuation Table
9.8/10Decision Grade
Scenario Range
$1116
Bear
$1494
Base
$1698
Bull
$1525