KLA (NASDAQ:KLAC) Shares Gap Down Following Insider Selling

Key Points

• KLA shares gapped down at the open after insider selling, falling from a prior close of $233.31 to an opening price of $217.12.
• CFO Bren D. Higgins and EVP Mary Beth Wilkinson both sold shares, with the filings noting Wilkinson’s sale was to cover tax withholding obligations tied to equity vesting.
• Despite the drop, analysts remain constructive on KLA, with a Moderate Buy consensus and an average price target of $280.34; the company also reported strong quarterly results that beat expectations.

KLA Corporation (NASDAQ:KLAC - Get Free Report)'s share price gapped down before the market opened on Tuesday following insider selling activity. The stock had previously closed at $233.31, but opened at $217.12. KLA shares last traded at $215.5260, with a volume of 1,826,442 shares changing hands.

Specifically, CFO Bren D. Higgins sold 27,701 shares of KLA stock in a transaction on Thursday, July 2nd. The shares were sold at an average price of $265.69, for a total transaction of $7,359,878.69. Following the transaction, the chief financial officer owned 263,472 shares in the company, valued at $70,001,875.68. This trade represents a 9.51% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this hyperlink. Also, EVP Mary Beth Wilkinson sold 14,392 shares of the business's stock in a transaction on Wednesday, July 1st. The shares were sold at an average price of $285.30, for a total transaction of $4,106,037.60. Following the sale, the executive vice president directly owned 53,367 shares of the company's stock, valued at approximately $15,225,605.10. The trade was a 21.24% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards.

Analysts Set New Price Targets

A number of equities analysts recently commented on the company. Citic Securities raised their target price on KLA from $135.00 to $197.00 in a report on Wednesday, May 6th. The Goldman Sachs Group raised their price objective on KLA from $150.50 to $155.00 and gave the stock a "neutral" rating in a research note on Thursday, April 30th. Scotiabank set a $200.00 price objective on KLA in a research report on Wednesday, June 10th. JPMorgan Chase & Co. boosted their price objective on KLA from $195.00 to $200.00 and gave the company an "overweight" rating in a research note on Thursday, April 30th. Finally, Barclays reissued an "overweight" rating and issued a $2,250.00 target price (up from $1,700.00) on shares of KLA in a report on Thursday, June 11th. Twenty investment analysts have rated the stock with a Buy rating and ten have given a Hold rating to the company's stock. According to data from MarketBeat.com, the company currently has a consensus rating of "Moderate Buy" and an average price target of $280.34.

KLA Stock Performance

The company has a quick ratio of 2.11, a current ratio of 3.03 and a debt-to-equity ratio of 1.01. The business has a 50 day moving average price of $213.01 and a two-hundred day moving average price of $170.82. The stock has a market cap of $279.40 billion, a P/E ratio of 60.54, a price-to-earnings-growth ratio of 2.61 and a beta of 1.41.

KLA (NASDAQ:KLAC - Get Free Report) last posted its quarterly earnings results on Wednesday, April 29th. The semiconductor company reported $9.40 EPS for the quarter, topping analysts' consensus estimates of $0.92 by $8.48. KLA had a return on equity of 91.89% and a net margin of 35.66%.The company had revenue of $3.42 billion for the quarter, compared to analysts' expectations of $3.37 billion. During the same period in the previous year, the firm earned $0.84 EPS. The firm's revenue was up 11.5% compared to the same quarter last year. KLA has set its Q4 2026 guidance at 8.870-10.870 EPS. On average, sell-side analysts forecast that KLA Corporation will post 3.71 earnings per share for the current fiscal year.

KLA Cuts Dividend

The business also recently announced a quarterly dividend, which was paid on Tuesday, June 2nd. Investors of record on Monday, May 18th were given a dividend of $0.23 per share. The ex-dividend date was Monday, May 18th. This represents a $0.92 dividend on an annualized basis and a dividend yield of 0.4%. KLA's dividend payout ratio is currently 26.06%.

KLA declared that its board has authorized a stock buyback plan on Thursday, March 12th that authorizes the company to buyback $7.00 billion in shares. This buyback authorization authorizes the semiconductor company to purchase up to 3.6% of its shares through open market purchases. Shares buyback plans are typically a sign that the company's board believes its stock is undervalued.

Institutional Trading of KLA

A number of institutional investors and hedge funds have recently bought and sold shares of the stock. PFA Pension Forsikringsaktieselskab bought a new position in shares of KLA during the 4th quarter valued at about $119,618,000. Clal Insurance Enterprises Holdings Ltd increased its holdings in shares of KLA by 151.2% in the first quarter. Clal Insurance Enterprises Holdings Ltd now owns 116,292 shares of the semiconductor company's stock worth $171,230,000 after purchasing an additional 70,000 shares during the last quarter. Pinebridge Investments LLC purchased a new stake in shares of KLA in the fourth quarter worth about $32,812,000. CoreCap Advisors LLC lifted its position in shares of KLA by 839.9% in the second quarter. CoreCap Advisors LLC now owns 25,940 shares of the semiconductor company's stock worth $7,826,000 after buying an additional 23,180 shares in the last quarter. Finally, Russell Investments Group Ltd. boosted its stake in KLA by 31.4% during the fourth quarter. Russell Investments Group Ltd. now owns 91,413 shares of the semiconductor company's stock valued at $111,910,000 after buying an additional 21,850 shares during the last quarter. 86.65% of the stock is currently owned by institutional investors.

KLA Company Profile

KLA is a provider of process control and yield management solutions for the semiconductor and related microelectronics industries. The company designs and manufactures equipment, software and services used by chipmakers to analyze and control manufacturing processes, detect defects, measure critical dimensions and improve yield across wafer fabrication, photomask and packaging operations. KLA's offerings are aimed at enabling production of advanced logic, memory, and specialty devices at progressively smaller technology nodes and more complex package structures.

Its product portfolio includes optical and e-beam inspection systems, metrology tools for critical dimension and film measurement, mask and reticle inspection platforms, as well as enterprise software and data analytics that aggregate process data and drive automated process control.

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