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

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In the latest close session, KLA (KLAC - Free Report) was up +1.36% at $1,078.60. This change outpaced the S&P 500's 0.41% gain on the day. Elsewhere, the Dow saw an upswing of 0.18%, while the tech-heavy Nasdaq appreciated by 0.31%.

The maker of equipment for manufacturing semiconductors's stock has climbed by 22.03% in the past month, exceeding the Computer and Technology sector's gain of 7.63% and the S&P 500's gain of 3.15%.

The upcoming earnings release of KLA will be of great interest to investors. The company is predicted to post an EPS of $8.47, indicating a 15.55% growth compared to the equivalent quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $3.16 billion, indicating a 11.04% upward movement from the same quarter last year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $34.55 per share and a revenue of $12.73 billion, representing changes of +3.82% and +4.76%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for KLA. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, there's been a 0.5% rise in the Zacks Consensus EPS estimate. KLA currently has a Zacks Rank of #3 (Hold).

In terms of valuation, KLA is presently being traded at a Forward P/E ratio of 30.8. This signifies a premium in comparison to the average Forward P/E of 19.84 for its industry.

It's also important to note that KLAC currently trades at a PEG ratio of 3.61. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. Electronics - Miscellaneous Products stocks are, on average, holding a PEG ratio of 1.85 based on yesterday's closing prices.

The Electronics - Miscellaneous Products industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 72, this industry ranks in the top 30% of all industries, numbering over 250.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these 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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