Cantor Fitzgerald has increased its price target for KLA Corp. (KLAC, Financial) from $800 to $950, maintaining an Overweight rating on the stock. According to the firm's recent analysis, they anticipate a slight improvement in Wafer Fab Equipment for the year 2025, primarily driven by domestic demand in China. Furthermore, expectations for calendar year 2026 indicate another potential growth phase. The company projects that consensus estimates for KLA Corp. and its industry peers will generally trend upwards, showing resilience to tariff-related issues and overly pessimistic concerns regarding Chinese regulatory actions.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 23 analysts, the average target price for KLA Corp (KLAC, Financial) is $810.74 with a high estimate of $950.00 and a low estimate of $590.00. The average target implies an downside of 5.32% from the current price of $856.28. More detailed estimate data can be found on the KLA Corp (KLAC) Forecast page.
Based on the consensus recommendation from 27 brokerage firms, KLA Corp's (KLAC, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for KLA Corp (KLAC, Financial) in one year is $665.92, suggesting a downside of 22.23% from the current price of $856.28. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the KLA Corp (KLAC) Summary page.
KLAC Key Business Developments
Release Date: April 30, 2025
- Revenue: $3.06 billion, above the guidance midpoint of $3 billion.
- Non-GAAP Diluted EPS: $8.41, at the upper end of the guidance range.
- GAAP Diluted EPS: $8.16, at the upper end of the guidance range.
- Gross Margin: 63%, about 50 basis points higher than the midpoint of guidance.
- Operating Expenses: $575 million, comprised of $338 million in R&D and $237 million in SG&A.
- Operating Margin: 44.2%.
- Net Income: $1.12 billion (GAAP net income: $1.09 billion).
- Free Cash Flow: $990 million for the quarter; $3.5 billion over the past 12 months.
- Free Cash Flow Margin: 30% over the past 12 months.
- Capital Returns: $733 million in the quarter, including $507 million in share repurchases and $226 million in dividends.
- Advanced Packaging Revenue: Expected to exceed $850 million in calendar 2025.
- KLA Services Revenue: $669 million in the March quarter, up 13% year over year.
- Cash Flow from Operations: $1.1 billion.
- Dividend Increase: 12% increase to $1.90 per share per quarter.
- Share Repurchase Authorization: New $5 billion authorization, raising total to $5.46 billion.
- June-Quarter Revenue Guidance: $3.75 billion, plus or minus $150 million.
- June-Quarter Gross Margin Guidance: 63%, plus or minus 1 percentage point.
- June-Quarter GAAP Diluted EPS Guidance: $8.28, plus or minus $0.78.
- June-Quarter Non-GAAP Diluted EPS Guidance: $8.53, plus or minus $0.78.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- KLA Corp (KLAC, Financial) reported March-quarter revenue of $3.06 billion, exceeding the midpoint of their guidance range.
- The company achieved a 30% year-over-year increase in revenue, driven by strong demand in leading-edge logic and high-bandwidth memory.
- KLA's Advanced Packaging business showed significant growth, with revenue expected to exceed $850 million in calendar 2025.
- The KLA Services business marked its 52nd consecutive quarter of year-over-year growth, demonstrating resilience despite export control impacts.
- KLA announced a 12% increase in its quarterly dividend, reflecting confidence in long-term value accretion and commitment to capital returns.
Negative Points
- Global trade uncertainties and potential tariff impacts pose risks to KLA's future business environment.
- The company postponed its Investor Day to early to mid-calendar 2026 due to macroeconomic uncertainties.
- Newly announced US government export controls impacted service revenue growth in the March quarter.
- KLA faces a 100 basis points headwind to gross margin per quarter due to global tariffs, affecting profitability.
- The company anticipates a slight decline in foundry/logic revenue in the second half of the year, indicating potential market challenges.
