The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 87 | 6.0x | 20.8x | Top tier | |
Growth | 76 | 13.4% | 6.1% | Top tier | |
Quality | 89 | 52.7% | 6.6% | Top tier | |
Safety | 79 | 0.2x | 0.7x | Top tier | |
Capital Return | 74 | 3.61% | 2.02% | Top tier | |
Momentum | 22 | 171.3% | 4.1% | Bottom tier | |
Sentiment | 59 | 17 | 3 | Around median |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
KLA is a global leader in providing process control and yield management solutions for the semiconductor and microelectronics industry. The company generates its profits primarily through the sale of advanced inspection and metrology equipment used by chip fabs to ensure production quality and reduce defects, in addition to a robust services segment that ensures the continuous performance of these complex tools. The company plays a crucial role in enabling the production of advanced logic chips and high-bandwidth memory chips, segments experiencing massive demand due to the global expansion of AI infrastructure.
In the third quarter of fiscal year 2026, the company achieved strong financial results with revenues reaching $3.4 billion, marking an 11% year-over-year increase. Gross profit reached $2.1 billion, while net income amounted to $1.2 billion with GAAP earnings per share of $9.12. The services segment also contributed significantly with revenues of $775 million, up 16% year-over-year, which provided free cash flows of $622 million during the quarter to support the company's strategy of returning capital to shareholders.
The company strengthened its competitive position by securing the number one spot in advanced chip packaging process control, a segment where management expects revenues to jump from $635 million in 2025 to approximately $1 billion in 2026. Regarding the customer mix, logic chips accounted for about 82% of total process control systems revenue for semiconductor customers, while memory captured the remaining 18%, reflecting a strategic diversification that protects the company from the volatility of individual product cycles.
KLA's stock holds an analyst consensus buy recommendation, with an average price target of $225.09, while analyst estimates range from a low of $145 to a high of $325. Looking at the stock's 52-week price range between $83.22 and $307.37, we find that the stock has traded at levels occasionally exceeding the average price target, reflecting the significant optimism driven by the AI boom. This valuation is supported by a market capitalization of $271.2 billion and strong financial performance that continues to outpace broader industry growth rates.
Figures in the text are as of 2026-07-21; the live price is shown at the top of the page.
The AI boom is a fundamental driver of KLA's performance, as complex AI chips require unprecedented levels of process control and precise inspection. The company directly benefits from the investments of major companies like Meta in infrastructure, which boosts demand for its equipment. This has led the company to raise its earnings forecasts and project advanced packaging revenue growth to reach approximately $1 billion in 2026.
KLA faces headwinds affecting gross margins due to the continuous rise in the costs of memory chips (DRAM) used in the image processing computers attached to its systems. Management expects this negative impact to persist at approximately 100 basis points over the coming quarters. Despite this, the company maintains relatively stable gross margin guidance at around 62% thanks to operational efficiency and a strong product mix.
Insider activity at KLA indicates a strong sell signal during the recent period, which may draw investors' attention. The past three months have seen net sales amounting to $31.2 million by company executives. These operations were spread across 7 sell transactions without recording any purchases, and the last recorded activity was on July 2, 2026.
Automated analysis for informational purposes only — not investment advice.
The services segment represents a fundamental pillar of KLA's business model, providing predictable cash flows to support share repurchases and dividend distributions. This segment generated revenues of $775 million in the third quarter of 2026, recording a year-over-year growth of 16%. The company targets a long-term compound annual growth rate for services revenue ranging between 13% and 15% through 2030, supported by the increasing complexity of systems and their extended operational lifespan in fabs.