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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Kla Corporation (XNAS:KLAC) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
KLAC
Name:
KLA Corporation (XNAS:KLAC)
Sector:
794.84M
Industry:
Semiconductor Equipment & Materials
CEO:
Mr. Richard Wallace
Total Employees:
14,000
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 32.63% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF KLA CORPORATION(KLAC) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SEMICONDUCTOR EQUIPMENT & MATERIALS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
335.25
One Month Price Target:
$337.78
Six Month Price Target :
$350.4
Likely Price in One Year's Time:
Ticker:
$365.56
Likely Trading Range Today Under (Normal Volatility)
$333.93
Price Upper limit ($) :
$337.59
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$313.65
This week:
$286.94
This month :
$238.63
Other Primary facts
Market Cap:
46.88B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
141.80M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
17.19%
-13.5%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$435.39
$388.71
$235.11
$281.79
Medium risk (<10%) entry points
Buy Call
Sell Call
$373.52
Buy Put:
Sell Put:
$363.55
$296.86
$306.95
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
KLAC
Sharpe Ratio:
4.48%
Comparison:
KLAC, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 61.33% higher than the industry
& ratio is 96.36% higher than the market/S&P 500 average
Average Returns/Yield of
KLAC
Daily returns:
0.15%
Weekly returns:
0.76%
Monthly returns:
3.05%
Yearly returns:
28.31%
Comparison of returns:
Average annual returns/yield (last 3 years) is 29.38% above industry average
Classification:
KLAC, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.5
Statistical test of Returns:
KLAC has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.21%
Weekly Volatility:
7.18%
Monthly Volatility:
14.36%
Yearly Volatility:
49.76%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.71%
Volatility in last five trading days has been -77.90% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.44%
Weekly VaR:
-14.41%
Monthly VaR:
-28.82%
How Much Can the price of
KLAC
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-24%
Worst case (decline):
>85%
This translates to price declining to:
$255.69
This translates to price declining to:
$50.29
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
KLAC is a 103.40% riskier investment compared to the market/S&P 500 & is 74.26% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -14.24% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
KLAC
Beta in relation to market/S&P 500--1.35
Expected beta in 1 year's time:
1.082
Expected beta in 3 year's time:
1.53
Unlevered (debt free) Beta:
0.717
Beta in relation to Nasdaq (XNAS):
1.424
Beta in relation to all global stocks::
1.028
Beta Comparison & Analysis
Beta of competitors/peers::
1.496
Beta is -10.10% lower than peers
Average Industry Beta:
1.394
Beta is -3.51% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
65.93%
Sustainable growth rate is 156.22% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.243
Alpha is 55.43% above industry average alpha yield
Alpha is 1544% higher than market/& is unsustainably high
Analysis of Cost of Capital of
KLAC
Equity cost of capital:
0.124
Equity cost of capital is -2.64% below industry mean WACC
Unlevered (without debt) cost of capital:
6.59%
Before-tax cost of debt:
4.41%
After-tax cost of debt:
3.48%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.48%
WACC is -10.32% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$61.00
Revenue growth rate per share of (3Y):
12.32
Annual revenue growth rate is 29.66% above the industry average
EPS:
$20.61
Expected Annual growth rate of EPS (3Y):
37.16%
Expected future EPS growth rate is 19.60% higher than the Semiconductor Equipment & Materials industry
Free cash flow (FCF) per share:
$19.01
Balance sheet equity growth per share: 41.16%
Equity growth rate per share is 73.91% higher than the industry
Debt per share
$24.61
EBITDA per share
$26.45
Valuation Analysis Today of
KLAC
P/E Ratio:
15.3
P/E Ratio of Competitors/Peers:
215.31
P/E ratio is -92.89% lower than main peers & is -46.67% lower than the industry
Stock price/value with industry average P/E ratio: $591.50
KLAC is -43.32% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $96.32
Present value of the expected future dividends only: $42.46
P/S (Price to Sales ratio):
5.5
Price to sales ratio is -14.15% below the industry mean
P/B (Price to book value ratio):
12.32
Price to free cash flow: 17.64
Price to free cash flow ratio is -54.16% lower than the industry
Net income growth rate (3Y):
162.85%
Net income growth rate is -76.19% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 5.17%
Dividend yeild: 1.25%
Previous Dividend: $1.05
Previous adjusted dividend: $1.05
Previous Dividend: $4.20
Expected next dividend best case: $1.12
Expected next dividend worst case: $0.98
Average dividend payment (long-term): $0.94
Average dividend increase/decrease (growth rate) % per period: 2.25%
Expected next dividend payment date: 30/08/2022
Expected next dividend record date: 15/08/2022
Expected next dividend declaration date: 08/03/2022
Previous dividend payment date: 06/01/2022
Previous dividend record date: 16/05/2022
Previous dividend declaration date: 05/05/2022
Dividend History:
2022-05-13--$1.05
2021-11-12--$1.05
2021-05-14--$0.90
2022-02-11--$1.05
2021-08-13--$1.05
2021-02-18--$0.90
Dividend growth rate is -121.82% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
90.38%
Net debt to equity ratio:
52.65%
Debt to assets ratio:
31.30%
Net debt to assets ratio:
18.24%
Debt-to-asset ratio is -37.17% below industry average
Ability to repay debt:
Interest coverage ratio:
24.03
Interest coverage ratio is 23.54% more than industry average
Looking forward:
Debt growth rate:
-0.66%
Annual debt growth is -183% lower than industry average debt growth rate
Debt repayment rate in last quarter: 7.92%
Analysis of Key Statistics
Correlation of price movement with the market:
0.774
Statistical significance of correlation:
KLAC has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.604
Stock price is 28.21% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.604
Correlation of price movement with Nasdaq (^IXIC):
0
Covariance of price movement with the market:
0
Kurtosis
3.98
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.337
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
KLAC
Gross Profit Margin Ratio:
243%
Operating Profit Margin Ratio:
39.30%
Operating profit margin is -975.45% lower than the industry
Net Profit Margin Ratio:
243%
Effective Tax Rate:
3.04%
Effective tax rate is -76.65% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
81.57%
Return on equity (ROE) is 473.75% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
28.25%
Return on assets (ROA) is 227.54% higher than the industry
Financial Leverage:
1.5x
Current Ratio:
2.44
Current ratio is -44.50% below industry average
Cash Conversion Cycle (days):
89.7
Cash conversion cycle is 54.00% above industry average
The remaining useful life of property plant & equipment is: 0.8 years
Stock based compensation to net income ratio:
0.80%
In-depth Efficiency Analysis
Revenue generated per employee:
617.9K
Each employee generates 5% more revenue than industry average revenue per employee
EBITDA generated per employee:
268.0K
Each employee generates 59% more EBITDA than industry average revenue per employee
Profit generated per employee:
225.0K
Each employee generates 106% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
56.8K
Each employee generates 230% more free cash flow than industry average revenue per employee
Assets/Capital per employee
357.3K
Each employee generates 230% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 7.48%
Growth rate in R&D investment/expenditure is -68.39% lower than the industry
Competitors/Peer firms of
KLAC
WORKDAY, INC. (XNAS:WDAY)
COINBASE GLOBAL, INC. (XNAS:COIN)
NXP Semiconductors NV (XNAS:NXPI)
MARVELL TECHNOLOGY, INC (XNAS:MRVL)
FISERV, INC. (XNAS:FISV)
FORTINET, INC. (XNAS:FTNT)
SYNOPSYS, INC. (XNAS:SNPS)
TEAM, INC. (XNYS:TISI)
XILINX, INC. (XNAS:XLNX)
Current Analyst Ratings
Strong buy�8%
Buy�17%
Hold�29%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
8.65B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
3.39B
5.26B
1.05B
-
815.25M
-
-
1.87B
-
156.11M
347.14M
3.75B
3.40B
3.15B
3.25B
98.66M
3.15B
Statement of Cash Flow
Date:
Period:
84.82M
Differed Income Tax :
- 427970.00K
Stock Based Compensation :
25.22M
Change in Working Capital :
91.64M
Accounts Receivables:
- 180354.00K
Other Working Capital:
38.38M
Other Non-Cash Items:
21.67M
Net Cash Provided by Operating Activities:
863.80M
Investments in PP&E:
-
Net Acquisitions:
- 37986.00K
Purchases of Investments:
- 286896.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
9/30/21
2022
Q1
1.51B
1.12B
2.62B
1.56B
1.72B
245.67M
6.14B
798.16M
2.04B
1.16B
-
665.67M
339.10M
5.00B
-
11.15B
380.83M
52.95M
162.49M
1.03B
1.06B
2.52B
3.49B
554.64M
4.76B
-
7.29B
2.14B
1.80B
- 78044.0K
-
September 30, 2021 at 6:00:00 AM
5.25B
3.86B
11.15B
-
3.54B
2.0B
218.53M
- 68955.00K
- 175306.00K
- 300000.00K
-
- 399677.00K
- 162821.00K
253.47M
- 609030.00K
- 4507.00K
74.95M
1.51B
1.43B
863.80M
- 68955.00K
794.84M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
KLAC
2023
2024
2025
2026
2027
$367.39
$2,026.22
$2,209.40
$2,409.14
$2,626.94