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KLA (KLAC) Exceeds Market Returns: Some Facts to Consider

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KLA (KLAC - Free Report) closed at $902.94 in the latest trading session, marking a +1.06% move from the prior day. This move outpaced the S&P 500's daily gain of 0.8%. On the other hand, the Dow registered a gain of 0.94%, and the technology-centric Nasdaq increased by 0.97%.

Shares of the maker of equipment for manufacturing semiconductors have appreciated by 14.91% over the course of the past month, outperforming the Computer and Technology sector's gain of 8.5%, and the S&P 500's gain of 5.12%.

Market participants will be closely following the financial results of KLA in its upcoming release. The company is forecasted to report an EPS of $8.53, showcasing a 29.24% upward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $3.08 billion, up 19.74% from the year-ago period.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $32.46 per share and revenue of $12.05 billion, indicating changes of +36.73% and +22.77%, respectively, compared to the previous year.

It is also important to note the recent changes to analyst estimates for KLA. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.04% upward. At present, KLA boasts a Zacks Rank of #2 (Buy).

From a valuation perspective, KLA is currently exchanging hands at a Forward P/E ratio of 27.52. This valuation marks a premium compared to its industry average Forward P/E of 19.08.

We can also see that KLAC currently has a PEG ratio of 1.7. 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. KLAC's industry had an average PEG ratio of 1.72 as of yesterday's close.

The Electronics - Miscellaneous Products industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 146, putting it in the bottom 41% 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.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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