Here's Why KLA (KLAC) Fell More Than Broader Market

In the latest trading session, KLA (KLAC) closed at $1,426.14, marking a -3.37% move from the previous day. This change lagged the S&P 500's 0.57% loss on the day. At the same time, the Dow lost 1.61%, and the tech-heavy Nasdaq lost 0.26%.

The stock of maker of equipment for manufacturing semiconductors has risen by 12.9% in the past month, leading the Computer and Technology sector's loss of 0.64% and the S&P 500's loss of 0.15%.

Market participants will be closely following the financial results of KLA in its upcoming release. The company is predicted to post an EPS of $9.12, indicating a 8.44% growth compared to the equivalent quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $3.37 billion, showing a 9.9% escalation compared to the year-ago quarter.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $36.58 per share and a revenue of $13.39 billion, signifying shifts of +9.92% and +10.12%, respectively, from the last year.

It is also important to note the recent changes to analyst estimates for KLA. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.1% higher. Currently, KLA is carrying a Zacks Rank of #2 (Buy).

Looking at its valuation, KLA is holding a Forward P/E ratio of 40.35. This indicates a premium in contrast to its industry's Forward P/E of 27.13.

It's also important to note that KLAC currently trades at a PEG ratio of 2.98. 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. As of the close of trade yesterday, the Electronics - Miscellaneous Products industry held an average PEG ratio of 1.87.

The Electronics - Miscellaneous Products industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 31, positioning it in the top 13% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.