KLA (KLAC) Stock Declines While Market Improves: Some Information for Investors

In the latest close session, KLA (KLAC) was down 1.45% at $889.87. The stock's performance was behind the S&P 500's daily gain of 0.52%. Meanwhile, the Dow experienced a rise of 1%, and the technology-dominated Nasdaq saw an increase of 0.52%.

Coming into today, shares of the maker of equipment for manufacturing semiconductors had gained 16.66% in the past month. In that same time, the Computer and Technology sector gained 9.55%, while the S&P 500 gained 5.95%.

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The investment community will be closely monitoring the performance of KLA in its forthcoming earnings report. The company is predicted to post an EPS of $8.53, indicating a 29.24% growth compared to the equivalent quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $3.08 billion, up 19.74% from the prior-year quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $32.46 per share and revenue of $12.05 billion. These totals would mark changes of +36.73% and +22.77%, respectively, from last year.

Investors should also take note of any recent adjustments to analyst estimates for KLA. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.04% higher. KLA is currently a Zacks Rank #2 (Buy).

Looking at valuation, KLA is presently trading at a Forward P/E ratio of 27.82. This expresses a premium compared to the average Forward P/E of 19.04 of its industry.

It's also important to note that KLAC currently trades at a PEG ratio of 1.72. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. By the end of yesterday's trading, the Electronics - Miscellaneous Products industry had an average PEG ratio of 1.74.

The Electronics - Miscellaneous Products industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 149, positioning it in the bottom 40% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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