📊 KLAC Key Takeaways
Is Kla Corp. (KLAC) a Good Investment?
KLA demonstrates exceptional operational execution with 23.9% revenue growth, outstanding 40.9% operating margins, and robust 59.5% ROE. Strong free cash flow generation of $2.9B (29.7% FCF margin) and excellent liquidity (3.03x current ratio) indicate solid financial health. However, flat net income growth despite strong revenue expansion raises concerns about margin compression and operational headwinds that warrant monitoring.
KLA shows high-quality fundamentals with strong revenue growth, exceptional operating and net margins, and free cash flow conversion that remains very robust. The balance sheet appears healthy on liquidity and interest coverage, while ROE and ROA indicate efficient capital use. The main restraint is that net income was flat despite strong sales growth, suggesting some mix, cost, tax, or capital-allocation effects that should be monitored before taking a more aggressive stance.
Kla Corp. Key Strengths (KLAC)
- Exceptional revenue growth of 23.9% YoY demonstrates strong market demand
- Outstanding profitability with 40.9% operating margin and 35.0% net margin, well above industry norms
- Exceptional returns on equity (59.5%) and assets (20.6%) show efficient capital deployment
- Strong free cash flow generation of $2.9B with 29.7% FCF margin provides financial flexibility
- Excellent liquidity position with 3.03x current ratio and strong interest coverage of 17.8x
- Effective capital allocation with 49.8% EPS growth despite flat net income through share buybacks
- Revenue grew 23.9% year over year while operating margin remained very strong at 40.6%
- Free cash flow of $2.33B and a 35.8% FCF margin indicate excellent cash generation quality
- Liquidity is solid with a 2.83x current ratio and 11.6x interest coverage despite meaningful debt
KLAC Stock Risks: Kla Corp. Investment Risks
- Flat net income growth (0.0% YoY) despite 23.9% revenue growth signals margin compression and operational challenges
- Unusually low gross margin of 11.6% is concerning and suggests potential cost pressures, pricing headwinds, or product mix challenges
- Elevated debt-to-equity ratio of 1.01x creates leverage risk if cash flows or demand deteriorate
- Minimal insider activity (1 Form 4 filing in 90 days) may indicate management caution about near-term outlook
- Gap between low gross margin and high operating margin suggests unsustainable cost structure or one-time benefits
- Net income was flat year over year even as revenue rose sharply, which may indicate pressure below the operating line or weaker earnings quality
- Leverage is material with long-term debt of $5.89B and debt-to-equity of 1.08x
- Reported gross margin of 17.7% is inconsistent with the much higher operating and net margins, creating some data-quality uncertainty
Key Metrics to Watch
- Gross margin trend - critical indicator of pricing power and cost control
- Net income growth rate relative to revenue growth - fundamental indicator of operational health
- Free cash flow sustainability given modest capex relative to operating cash flow
- Debt-to-equity ratio and interest coverage trends under revenue volatility
- Operating cash flow conversion rate as leading indicator of earnings quality
- Net income growth relative to revenue growth
- Free cash flow margin consistency
Kla Corp. (KLAC) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 29.7% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. Strong liquidity with a 3.03x current ratio provides a solid financial cushion.
KLAC Profit Margin, ROE & Profitability Analysis
KLAC vs Industrial Sector: How Kla Corp. Compares
How Kla Corp. compares to Industrial sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Kla Corp. Stock Overvalued? KLAC Valuation Analysis 2026
Based on fundamental analysis, Kla Corp. appears fundamentally strong relative to the Industrial sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Kla Corp. Balance Sheet: KLAC Debt, Cash & Liquidity
KLAC Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Kla Corp.'s revenue has grown significantly by 76% over the 5-year period, indicating strong business expansion. The most recent EPS of $24.15 reflects profitable operations.
KLAC Revenue Growth, EPS Growth & YoY Performance
KLAC Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2026 | $3.1B | $824.5M | $8.16 |
| Q2 2026 | $3.1B | $824.5M | $6.16 |
| Q1 2026 | $2.8B | $945.9M | $7.01 |
| Q3 2025 | $2.4B | $582.5M | $4.43 |
| Q2 2025 | $2.5B | $582.5M | $4.28 |
| Q1 2025 | $2.4B | $741.4M | $5.41 |
| Q3 2024 | $2.4B | $582.5M | $4.43 |
| Q2 2024 | $2.5B | $582.5M | $4.28 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Kla Corp. Dividends, Buybacks & Capital Allocation
KLAC SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Kla Corp. (CIK: 0000319201)
📋 Recent SEC Filings
❓ Frequently Asked Questions about KLAC
What is the AI rating for KLAC?
Kla Corp. (KLAC) has a Combined AI Grade of A from Claude (A) and ChatGPT (A) with 81% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are KLAC's key strengths?
Claude: Exceptional revenue growth of 23.9% YoY demonstrates strong market demand. Outstanding profitability with 40.9% operating margin and 35.0% net margin, well above industry norms. ChatGPT: Revenue grew 23.9% year over year while operating margin remained very strong at 40.6%. Free cash flow of $2.33B and a 35.8% FCF margin indicate excellent cash generation quality.
What are the risks of investing in KLAC?
Claude: Flat net income growth (0.0% YoY) despite 23.9% revenue growth signals margin compression and operational challenges. Unusually low gross margin of 11.6% is concerning and suggests potential cost pressures, pricing headwinds, or product mix challenges. ChatGPT: Net income was flat year over year even as revenue rose sharply, which may indicate pressure below the operating line or weaker earnings quality. Leverage is material with long-term debt of $5.89B and debt-to-equity of 1.08x.
What is KLAC's revenue and growth?
Kla Corp. reported revenue of $9.9B.
Does KLAC pay dividends?
Kla Corp. pays dividends, with $752.5M distributed to shareholders in the trailing twelve months.
Where can I find KLAC SEC filings?
Official SEC filings for Kla Corp. (CIK: 0000319201) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is KLAC's EPS?
Kla Corp. has a diluted EPS of $26.26.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is KLAC's fundamental grade?
Based on our AI fundamental analysis in June 2026, Kla Corp. has a A grade with 81% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is KLAC stock overvalued or undervalued?
Valuation metrics for KLAC: ROE of 59.5% (sector avg: 15%), net margin of 35.0% (sector avg: 10%). Higher ROE suggests strong returns relative to peers.
What is KLAC's AI grade for 2026?
Our dual AI analysis gives Kla Corp. a combined A grade for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is KLAC's free cash flow?
Kla Corp.'s operating cash flow is $3.2B, with capital expenditures of $286.7M. FCF margin is 29.7%.
How does KLAC compare to other Industrial stocks?
Vs Industrial sector averages: Net margin 35.0% (avg: 10%), ROE 59.5% (avg: 15%), current ratio 3.03 (avg: 1.8).
Why is KLAC's return on equity (ROE) so high?
Kla Corp. has a return on equity of 59.5%, significantly above the Industrial sector average of 15%. A high ROE indicates the company is efficient at generating profits from shareholder equity. This is supported by a 35.0% net margin.