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KLA (KLAC) Suffers a Larger Drop Than the General Market: Key Insights

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KLA (KLAC - Free Report) closed at $758.85 in the latest trading session, marking a -1.76% move from the prior day. The stock fell short of the S&P 500, which registered a loss of 0.19% for the day. On the other hand, the Dow registered a gain of 0.09%, and the technology-centric Nasdaq decreased by 0.36%.

Prior to today's trading, shares of the maker of equipment for manufacturing semiconductors had lost 3.27% over the past month. This has lagged the Computer and Technology sector's loss of 0.09% and the S&P 500's gain of 2.06% in that time.

The upcoming earnings release of KLA will be of great interest to investors. The company is predicted to post an EPS of $7.02, indicating a 22.3% growth compared to the equivalent quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $2.76 billion, indicating a 14.98% upward movement from the same quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $29.09 per share and revenue of $11.52 billion. These totals would mark changes of +22.54% and +17.39%, respectively, from last year.

Investors should also pay attention to any latest changes in analyst estimates for KLA. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. KLA is currently a Zacks Rank #3 (Hold).

Looking at its valuation, KLA is holding a Forward P/E ratio of 26.55. This signifies a premium in comparison to the average Forward P/E of 18.47 for its industry.

We can additionally observe that KLAC currently boasts a PEG ratio of 1.54. 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. The average PEG ratio for the Electronics - Miscellaneous Products industry stood at 2.21 at the close of the market yesterday.

The Electronics - Miscellaneous Products industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 135, finds itself in the bottom 47% echelons 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.

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


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