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KLA Corporation (NASDAQ:KLAC) came out with its third-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. KLA reported US$3.1b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$8.16 beat expectations, being 5.4% higher than what the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on KLA after the latest results.
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Taking into account the latest results, the consensus forecast from KLA's 26 analysts is for revenues of US$12.4b in 2026. This reflects an okay 7.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 13% to US$31.42. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$12.3b and earnings per share (EPS) of US$29.66 in 2026. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
See our latest analysis for KLA
The consensus price target was unchanged at US$786, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values KLA at US$900 per share, while the most bearish prices it at US$590. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await KLA shareholders.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that KLA's revenue growth is expected to slow, with the forecast 6.0% annualised growth rate until the end of 2026 being well below the historical 13% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 16% per year. Factoring in the forecast slowdown in growth, it seems obvious that KLA is also expected to grow slower than other industry participants.