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KLA (KLAC) Dips More Than Broader Market: What You Should Know

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KLA (KLAC - Free Report) ended the recent trading session at $1,172.02, demonstrating a -4.2% change from the preceding day's closing price. The stock trailed the S&P 500, which registered a daily loss of 1.16%. Meanwhile, the Dow lost 0.47%, and the Nasdaq, a tech-heavy index, lost 1.81%.

Shares of the maker of equipment for manufacturing semiconductors witnessed a gain of 8.93% over the previous month, beating the performance of the Computer and Technology sector with its gain of 1%, and the S&P 500's gain of 1.03%.

The investment community will be closely monitoring the performance of KLA in its forthcoming earnings report. The company's upcoming EPS is projected at $8.75, signifying a 6.71% increase compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $3.24 billion, up 5.39% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $35.42 per share and a revenue of $13.04 billion, indicating changes of +6.43% and +7.24%, respectively, from the former year.

Investors might also notice recent changes to analyst estimates for KLA. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.04% higher. As of now, KLA holds a Zacks Rank of #3 (Hold).

In terms of valuation, KLA is presently being traded at a Forward P/E ratio of 34.54. This valuation marks a premium compared to its industry average Forward P/E of 24.48.

It's also important to note that KLAC currently trades at a PEG ratio of 3.33. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Electronics - Miscellaneous Products industry currently had an average PEG ratio of 1.88 as of yesterday's close.

The Electronics - Miscellaneous Products industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 68, placing it within the top 28% of over 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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