KLA Corporation (NASDAQ: KLAC): Reassessing Prospects


    The Vanguard Group, Inc. has recently announced that it has increased stake in KLA Corporation (NASDAQ:KLAC) by 2.79%. After grabbing 18.7 million shares, the institutional investor is now in possession of 0.51 million shares of the Technology Company. The new investment brought the stake of investor firm to 12.06% having worth around $3.74 billion. Moreover, Wellington Management Co. LLP increased its share by 1.12 million to have a control over 9.8 million shares. And BlackRock Fund Advisors raised its holdings to 0.12 million shares by acquiring 8.95 million shares or 5.77% of the stake.

    KLA Corporation (KLAC) concluded trading on 08/27/20 at a closing price of $204.45, with 1.1 million shares of worth about $225.21 million changed hands on the day. Weekly performance of the stock remained negative as price took a plunge of -1.16% during that period and on Thursday the price saw a loss of about -3.67%. Currently the company’s common shares owned by public are about 155.12M shares, out of which, 154.96M shares are available for trading.

    A deeper look into what the analysts at Wall Street are thinking about the price target of this stock provides us with the following: 19 analysts are covering the KLAC stock and their offered price forecasts bring an average price target of $220.31. Over the next 12 months, analysts forecasted that the stock’s price could jump as high as $265.00 and could fall to a lowest price of $180.00. Analysts also issued an outlook of 2.40 for the KLA Corporation stock for next 12 months. The stock’s current price level is 5.94% above of average price target set by the analysts, while a rise to estimated low would result in loss of -13.58 for the stock. However, touching the estimated high of $265.00 would mean a gain of 22.85% for the stock.

    According to filings with the U.S. Securities and Exchange Commission (SEC), insiders took part in trade of the company’s stock for 260 times over the past 12 months. They bought 611,640 shares in 97 of the transactions. In 163 selling transactions, insiders dumped 533,905 shares.

    Vanguard PRIMECAP Fund, Vanguard Total Stock Market Index, and Vanguard Mid Cap Index Fund are the top 3 mutual funds which are holding stakes in KLA Corporation Vanguard PRIMECAP Fund is currently holding 5.18 million shares of worth totaling $1.04 billion. The company recently came buying 0.0 shares which brought its stake up to 3.34% of the company’s outstanding shares. Vanguard Total Stock Market Index sold 12679.0 shares, after which its hold over company’s outstanding shares shrunk to 2.84%, leaving 4.4 million shares with the mutual fund that have a worth of about $880.24 million. Vanguard Mid Cap Index Fund, after selling 3.81 million shares, have now control over 2.45% of the stake in the company. It holds 28466.0 shares of worth $760.43 million.

    KLA Corporation (NASDAQ: KLAC) started trading at $213.78, above $1.55 from concluding price of the previous day. However, the stock finished the trading on the day at a closing price of $204.45, or with a loss of -3.67%. Stock saw a price change of -1.16% in past 5 days and over the past one month there was a price change of 4.78%. Year-to-date (YTD), KLAC shares are showing a performance of 14.75% which increased to 42.41% when we look at its performance for past 12 months. Over the period of past 52 weeks, stock dropped to lowest price of $110.19 but also hit the highest price of $218.57 during that period. While comparing its average daily trading volume of 1.21 million shares, we see that about 1.1 million changed hands on the day. The stock is currently trading -1.10% below its 20-day simple moving average (SMA20), while that difference is up 1.79% for SMA50 and it goes to 17.38% higher than SMA200.

    The Vanguard Group, Inc. acquired 18.7 million shares of KLA Corporation having value of about $3.74 billion. Data submitted at the U.S SEC by The Vanguard Group, Inc. revealed that the firm now holds 0.51 million shares in the company valued at close to $103635909.45, or have control over 2.79% stake in the company. KLA Corporation (NASDAQ: KLAC) currently have 155.12M outstanding shares and institutions hold larger chunk of about 98.00% of that. Holding of mutual funds in the company is about 3.62% while other institutional holders and individual stake holders have control over 63.69% and 28.99% of the stake respectively.

    The stock has a current market capitalization of $32.23B and its 3Y-monthly beta is at 1.33. PE ratio of stock for trailing 12 months is 26.57, while it has posted earnings per share of $7.69 in the same period. Its PEG reads 2.50 and has Quick Ratio of 2.00 while making debt-to-equity ratio of 1.30. Volatility of a stock is a metric used to know how much the price of that stock is under influence and for KLAC, volatility over the week remained 2.52% while standing at 2.49% over the month.

    Analysts are in expectations that KLA Corporation (KLAC) stock would likely to be making an EPS of $2.77 in the current quarter, while forecast for next quarter ESPS is $2.8 and it is $12.36 for next year. For the current quarter EPS, analysts have given the company a lowest target $2.73 which is $2.89 at the higher side of the target for the same. When we compare those targets with actual EPS, we find that company posted an EPS of $2.48 in the same quarter a year ago. Stock’s fiscal year EPS is expected to rise by 4.50% while it is estimated to increase by 8.34% in next year. EPS is likely to shrink at an annualized rate of 10.64% for next 5-years, compared to annual growth of 28.10% made by the stock over the past 5-years.

    Analysts at 19 brokerage firms have issued recommendations for the KLA Corporation (KLAC)’s stock and average of those rates the stock at a “Moderate Buy” and assign it a score of 2.40. Out of those 19 Wall Street analysts, 7 recommended a “Buy” rating, while 12 were in favor recommending the stock as a “Hold” and 0 analyst recommended the stock as “Sell”.

    Digging deeper we find that several firms have released their research notes about the support levels of the stock. Most recent of them is a note released by Cowen on August 04, 2020 offering a Market perform rating for the stock and assigned a target price range of between $200 and $205 to it. Coverage by Cowen stated KLA Corporation (KLAC) stock as a Market perform in their note to investors on July 09, 2020, suggesting a price target of $200 for the stock. On June 22, 2020, Stifel Downgrade their recommendations, while on June 17, 2020, Evercore ISI Downgrade their ratings for the stock with a price target of $210. Stock get an Equal weight rating from Barclays on May 26, 2020.


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