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Why KLA (KLAC) Outpaced the Stock Market Today

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KLA (KLAC - Free Report) closed the latest trading day at $549, indicating a +0.8% change from the previous session's end. This move outpaced the S&P 500's daily gain of 0.59%. Elsewhere, the Dow gained 0.82%, while the tech-heavy Nasdaq added 0.55%.

Prior to today's trading, shares of the maker of equipment for manufacturing semiconductors had gained 11.3% over the past month. This has lagged the Computer and Technology sector's gain of 11.62% and outpaced the S&P 500's gain of 9.16% in that time.

Market participants will be closely following the financial results of KLA in its upcoming release. It is anticipated that the company will report an EPS of $5.88, marking a 20.33% fall compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $2.46 billion, reflecting a 17.72% fall from the equivalent quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $23.34 per share and revenue of $9.72 billion, indicating changes of -8% and -7.41%, respectively, compared to the previous year.

Investors should also take note of any recent adjustments to analyst estimates for KLA. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.79% increase. Currently, KLA is carrying a Zacks Rank of #2 (Buy).

Looking at its valuation, KLA is holding a Forward P/E ratio of 23.33. This represents a premium compared to its industry's average Forward P/E of 16.67.

Meanwhile, KLAC's PEG ratio is currently 2.35. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. By the end of yesterday's trading, the Electronics - Miscellaneous Products industry had an average PEG ratio of 2.35.

The Electronics - Miscellaneous Products industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 166, positioning it in the bottom 35% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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