KLA Corporation (KLAC) Stock Valuation — PE Analysis
Semiconductors · NASDAQ
Current Price
$180.64
PE Ratio (TTM)
49.0x
Intrinsic Value
$303.18
+40.4% margin of safety
COMPETITIVE MOAT
↑Advanced Process Control Expertise
KLA's deep expertise in process control and metrology is critical for complex chip manufacturing. This specialized knowledge creates high switching costs for foundries.
↑Data and Scale Advantage
KLA collects vast amounts of data from its installed base, enabling continuous improvement of its algorithms. This data advantage is difficult for competitors to replicate.
↑Ecosystem Lock-in in Chipmaking
KLA's equipment is deeply integrated into semiconductor fabrication workflows. Foundries rely on KLA's solutions for yield optimization and quality assurance.
INVESTMENT RISKS
↓Cyclical Semiconductor Industry
The semiconductor industry is inherently cyclical, with periods of high demand followed by downturns. This can lead to volatile revenue for KLA.
↓Technological Disruption in Metrology
Rapid advancements in chip technology could render KLA's current solutions obsolete. Continuous innovation is essential to maintain its competitive edge.
↓Geopolitical and Trade Tensions
Global trade disputes and geopolitical instability can disrupt semiconductor supply chains and impact KLA's access to key markets and suppliers.
Base case
KLAC base case PE valuation
At a current price of $180.64, the base case PE valuation puts KLAC fair value near $303.18 per share. That figure assumes 20.0% yearly earnings growth, a target PE multiple of 49.09x, and a 10% discount rate.
Intrinsic Value
$303.18
Margin of safety
+40.4%
Expected annual return
+10.9%
Base case assumptions: 20.0% annual earnings growth, 49.09x target PE, 10% discount rate, 5 year projection. Data as of 2026-09-11.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the KLAC PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for KLA Corporation respond.
Open PE Calculator for KLACCompany Overview
KLA Corporation specializes in creating, manufacturing, and distributing advanced solutions vital for process control, process optimization, and yield enhancement throughout the global semiconductor and broader electronics industries. The company organizes its business into four main segments: Semiconductor Process Control, Specialty Semiconductor Process, PCB, Display and Component Inspection, and an 'Other' category. For integrated circuit (IC) fabrication, KLA offers a comprehensive range of products. These include systems for wafer inspection, review, and metrology; defect inspection and metrology for both wafers/substrates and reticles; chemical and materials quality analysis tools; and real-time process management and wafer handling diagnostics essential for IC and original equipment manufacturer (OEM) production. Furthermore, the company develops software for live process control, defect excursion identification, process corrections, and defect classification. KLA also supplies refurbished and remanufactured equipment. Beyond IC manufacturing, KLA supports specialty semiconductor production. This includes benchtop metrology, surface characterization, and electrical property measurement services suitable for general-purpose and laboratory use. They also provide technologies and solutions for etching, plasma dicing, deposition, and various other wafer processing tasks within the semiconductor and microelectronics sectors. Within the printed circuit board (PCB) market, KLA delivers solutions such as direct imaging, inspection, optical shaping, additive printing, and computer-aided manufacturing and engineering. For the display industry, their offerings encompass inspection and electrical testing systems to pinpoint and categorize defects, as well as equipment for defect repair. KLA also supplies inspection and metrology systems designed to improve quality control and yield in both advanced and conventional semiconductor packaging markets. Established in 1975, the company was initially known as KLA-Tencor Corporation before rebranding as KLA Corporation in July 2019. Its corporate headquarters are situated in Milpitas, California.
Financial Metrics — KLAC PE Stock Valuation Data
PE Ratio (TTM)
49.0x
PEG Ratio
2.42
Earnings Yield
2.04%
ROE (TTM)
85.4%
Revenue/Share (TTM)
$10.35
Dividend Yield
0.47%
Debt/Equity
0.97x
Frequently Asked Questions
What is the PE ratio of KLAC?
The trailing twelve-month PE ratio of KLAC reflects how much investors pay per dollar of KLA Corporation's earnings. This metric is most useful when compared to Semiconductors peers and the company's own historical range.
Is KLAC overvalued based on PE ratio?
KLAC's PE of 49.0x combined with a PEG ratio of 2.42 provides a growth-adjusted perspective. A PEG above 2.0 means the P/E is high relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Semiconductors, a DCF analysis may be more appropriate.
How do I value KLAC stock using PE ratio?
To value KLA Corporation using PE: (1) Compare the current PE (49.0x) against the Semiconductors median to assess relative pricing, (2) check the PEG ratio (2.42) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of KLAC?
KLAC's PEG ratio is 2.42, calculated by dividing the PE ratio (49.0x) by the expected earnings growth rate. A PEG above 2.0 means the P/E is high relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for KLAC stock valuation?
PE ratio gives a quick relative read — how KLAC is priced versus Semiconductors peers. DCF provides an absolute value based on projected free cash flows. For KLAC, with a strong ROE of 85.4%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See KLAC DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Technology valuationsP/E and DCF value KLAC with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-09-11. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.