Market Update: KLA Portfolio Faces Mixed Results Ahead of Earnings Report
In the latest market close, KLA (KLAC) reached $670.25, moving down 1.81% compared to the previous day. This performance trailed the S&P 500’s minimal daily loss of 0.02%. In contrast, the Dow rose by 0.38%, while the tech-heavy Nasdaq experienced a slight increase of 0.04%.
Over the past month, KLA, a manufacturer of semiconductor equipment, has seen its stock decrease by 6.63%. This decline is notable, especially given that the broader Computer and Technology sector enjoyed a gain of 4.44%, while the S&P 500 saw an increase of 3.77% in the same time frame.
Upcoming Earnings Report Anticipation
Investors are closely monitoring KLA’s upcoming earnings announcement scheduled for October 30, 2024. Analysts expect the company to report earnings of $7.03 per share, which would mark an impressive year-over-year growth of 22.47%. Additionally, the consensus estimate for revenue is projected at $2.76 billion, indicating a notable increase of 14.98% from the same quarter last year.
For the full year, Zacks Consensus Estimates indicate projected earnings of $29.09 per share and total revenue of $11.48 billion. If realized, these figures would show growth changes of +22.54% and +16.99%, respectively, from the previous year.
Keeping an Eye on Analyst Estimates
Investors should also pay attention to recent revisions in analyst forecasts for KLA. These adjustments often reflect the changing dynamics of the company’s short-term performance. Positive revisions can signal a favorable outlook on the company’s profitability and overall business health.
Our research demonstrates that these estimate changes tend to correlate with short-term stock price movements. To leverage this insight, we developed the Zacks Rank, an actionable rating model. It evaluates estimate changes, providing clear investment guidance.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has a strong historical record. Stocks ranked #1 have yielded an average annual return of +25% since 1988. Currently, KLA holds a Zacks Rank of #4 (Sell), with no changes in the consensus EPS projections over the past month.
Valuation Insights
Examining KLA’s valuation, it has a Forward P/E ratio of 23.46, putting it at a premium compared to the industry average of 18.81. Additionally, KLA has a PEG ratio of 1.36, which, like the P/E ratio, includes expected earnings growth. The Electronics – Miscellaneous Products industry’s average PEG ratio is 2.1 as of yesterday’s close.
This industry is part of the larger Computer and Technology sector, currently ranked 145 out of more than 250 industries by Zacks. The Zacks Industry Rank assesses the strength of these groups, noting that higher-ranked industries tend to outperform lower-ranked ones significantly.
Investors are encouraged to utilize Zacks.com to track these stock-influencing metrics and more in the coming trading sessions.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.