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KLA (KLAC) Falls More Steeply Than Broader Market: What Investors Need to Know

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KLA (KLAC - Free Report) closed the latest trading day at $552.59, indicating a -1.39% change from the previous session's end. This change lagged the S&P 500's 0.8% loss on the day. Meanwhile, the Dow lost 0.76%, and the Nasdaq, a tech-heavy index, lost 1.18%.

Heading into today, shares of the maker of equipment for manufacturing semiconductors had gained 4.31% over the past month, outpacing the Computer and Technology sector's gain of 2.11% and the S&P 500's gain of 3.4% in that time.

Market participants will be closely following the financial results of KLA in its upcoming release. The company's earnings per share (EPS) are projected to be $5.87, reflecting a 20.46% decrease from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.46 billion, down 17.72% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $23.34 per share and a revenue of $9.72 billion, demonstrating changes of -8% and -7.42%, respectively, from the preceding year.

Any recent changes to analyst estimates for KLA should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.01% higher within the past month. As of now, KLA holds a Zacks Rank of #3 (Hold).

Looking at its valuation, KLA is holding a Forward P/E ratio of 24.01. This valuation marks a premium compared to its industry's average Forward P/E of 18.78.

It's also important to note that KLAC currently trades at a PEG ratio of 3.54. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Electronics - Miscellaneous Products industry had an average PEG ratio of 2.04 as trading concluded yesterday.

The Electronics - Miscellaneous Products industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 203, positioning it in the bottom 20% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.


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