InvestorsObserver gives KLA Corp (KLAC) a strong valuation score of 75 from its analysis. The proprietary scoring system considers the underlying health of a company by analyzing its stock price, earnings, and growth rate. KLAC currently holds a better value than 75% of stocks based on these metrics. Long term investors focused on buying-and-holding should find the valuation ranking system most relevant when making investment decisions.
Metrics Analysis
KLAC has a trailing twelve month Price to Earnings (PE) ratio of 24.1 which places it above the histroical average of roughly 15. KLAC is currently trading at a poor value due to investors paying more than what the stock is worth in relation to its earnings. KLAC's trailing-12-month earnings per share (EPS) of 11.91 does not justify its share price in the market. Trailing PE ratios do not factor in the company's projected growth rate, thus, some firms will have high PE ratios caused by high growth recruiting more investors even if the underlying company has produced low earnings so far.
KLAC has a 12 month forward PE to Growth (PEG) ratio of 1.52. Markets are undervaluing KLAC in relation to its projected growth as its PEG ratio is currently below the fair market value of 1. 11.9099998's PEG comes from its forward price to earnings ratio being divided by its growth rate. PEG ratios are one of the most used valuation metrics due to its incorporation of more company fundamentals metrics and a focus on the firm's future rather than its past.
Summary
All together these valuation metrics paint a pretty poor picture for KLAC at its current price due to a overvalued PEG ratio despite strong growth. The PE and PEG for KLAC are worse than the average of the market resulting in a valuation score of 75.
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