KLA (KLAC) closed the most recent trading day at $681.50, moving +0.16% from the previous trading session. The stock exceeded the S&P 500, which registered a loss of 0.91% for the day. Elsewhere, the Dow lost 1.5%, while the tech-heavy Nasdaq lost 1.96%.
The maker of equipment for manufacturing semiconductors's stock has dropped by 9.35% in the past month, exceeding the Computer and Technology sector's loss of 10.57% and lagging the S&P 500's loss of 7.38%.
The investment community will be closely monitoring the performance of KLA in its forthcoming earnings report. The company is forecasted to report an EPS of $8.07, showcasing a 53.42% upward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $3.01 billion, up 27.4% from the year-ago period.
For the full year, the Zacks Consensus Estimates are projecting earnings of $31.59 per share and revenue of $11.91 billion, which would represent changes of +33.07% and +21.35%, respectively, from the prior year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for KLA. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's 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, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Currently, KLA is carrying a Zacks Rank of #2 (Buy).
In terms of valuation, KLA is presently being traded at a Forward P/E ratio of 21.54. Its industry sports an average Forward P/E of 19.59, so one might conclude that KLA is trading at a premium comparatively.
Also, we should mention that KLAC has a PEG ratio of 1.38. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Electronics - Miscellaneous Products industry held an average PEG ratio of 1.38.
The Electronics - Miscellaneous Products industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 129, finds itself in the bottom 49% echelons 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.
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This article originally published on Zacks Investment Research (zacks.com).
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