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KLA (KLAC) Stock Sinks As Market Gains: What You Should Know

KLA (KLAC) closed the most recent trading day at $465.65, moving -1.73% from the previous trading session. This move lagged the S&P 500's daily gain of 0.12%. Elsewhere, the Dow gained 0.13%, while the tech-heavy Nasdaq lost 4.09%.

Prior to today's trading, shares of the maker of equipment for manufacturing semiconductors had gained 22.59% over the past month. This has outpaced the Computer and Technology sector's gain of 9.32% and the S&P 500's gain of 3.98% in that time.

KLA will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $4.82, down 17.04% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $2.25 billion, down 9.63% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $24.88 per share and revenue of $10.39 billion. These totals would mark changes of +17.64% and +12.77%, respectively, from last year.

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Investors should also note any recent changes to analyst estimates for KLA. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.08% higher within the past month. KLA is currently a Zacks Rank #3 (Hold).

In terms of valuation, KLA is currently trading at a Forward P/E ratio of 19.05. For comparison, its industry has an average Forward P/E of 19.18, which means KLA is trading at a discount to the group.

Also, we should mention that KLAC has a PEG ratio of 2.87. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Electronics - Miscellaneous Products stocks are, on average, holding a PEG ratio of 1.93 based on yesterday's closing prices.

The Electronics - Miscellaneous Products industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 107, which puts it in the top 43% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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KLA Corporation (KLAC) : Free Stock Analysis Report

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