KLA (NASDAQ:KLAC) Stock Falls 3.2% - Should You Sell?

Key Points

• KLA shares fell 3.2% to $184.00 in midday trading, below both the 50-day moving average of $188.19 and the 200-day average of $196.20.
• Analyst sentiment remains positive overall, with 18 Buy ratings and 11 Holds producing a “Moderate Buy” consensus and an average price target of $221.26, despite recent downgrades from Zacks Research and Weiss Ratings.
• KLA reported quarterly revenue of $3.66 billion and EPS of $1.05, exceeding estimates, while revenue rose 15.2% year over year. The company also maintains a $0.92 annual dividend, although insiders have sold approximately $46.9 million of stock over the past 90 days.

KLA Corporation (NASDAQ:KLAC - Get Free Report)'s stock price dropped 3.2% during trading on Tuesday. The stock traded as low as $179.84 and last traded at $184.00. 9,961,499 shares were traded during mid-day trading, a decline of 10% from the average daily volume of 11,054,104 shares. The stock had previously closed at $190.12.

Analyst Ratings Changes

KLAC has been the topic of a number of recent analyst reports. Zacks Research lowered KLA from a "strong-buy" rating to a "hold" rating in a research report on Monday, September 28th. Susquehanna set a $215.00 price target on shares of KLA and gave the stock a "neutral" rating in a research report on Wednesday, July 29th. Jefferies Financial Group restated a "buy" rating and issued a $210.00 price target (up from $200.00) on shares of KLA in a research note on Wednesday, July 29th. Weiss Ratings cut shares of KLA from a "buy (b-)" rating to a "hold (c+)" rating in a report on Friday, October 2nd. Finally, TD Cowen reiterated a "buy" rating and set a $260.00 price objective (up from $200.00) on shares of KLA in a research note on Thursday, July 9th. Eighteen analysts have rated the stock with a Buy rating and eleven have given a Hold rating to the stock. According to MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and an average price target of $221.26.

KLA Price Performance

The company has a quick ratio of 2.03, a current ratio of 2.88 and a debt-to-equity ratio of 0.93. The company has a 50 day simple moving average of $188.19 and a 200-day simple moving average of $196.20. The stock has a market cap of $240.12 billion, a price-to-earnings ratio of 50.18, a PEG ratio of 1.73 and a beta of 1.45.

KLA (NASDAQ:KLAC - Get Free Report) last issued its earnings results on Tuesday, July 28th. The semiconductor company reported $1.05 EPS for the quarter, topping the consensus estimate of $1.00 by $0.05. KLA had a return on equity of 87.66% and a net margin of 35.57%. The company had revenue of $3.66 billion during the quarter, compared to analyst estimates of $3.61 billion. During the same quarter last year, the firm earned $0.94 EPS. The business's revenue was up 15.2% on a year-over-year basis. KLA has set its Q1 2027 guidance at 1.060-1.260 EPS. As a group, research analysts anticipate that KLA Corporation will post 5.43 EPS for the current fiscal year.

KLA Increases Dividend

The firm also recently declared a quarterly dividend, which was paid on Tuesday, September 1st. Stockholders of record on Monday, August 17th were given a $0.23 dividend. This represents a $0.92 dividend on an annualized basis and a dividend yield of 0.5%. The ex-dividend date was Monday, August 17th. This is an increase from KLA's previous quarterly dividend of $0.23. KLA's payout ratio is 25.07%.

Insider Buying and Selling at KLA

In other KLA news, EVP MaryBeth Wilkinson sold 13,802 shares of KLA stock in a transaction that occurred on Wednesday, August 5th. The stock was sold at an average price of $195.50, for a total value of $2,698,291.00. Following the completion of the transaction, the executive vice president directly owned 22,110 shares in the company, valued at $4,322,505. The trade was a 38.43% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, CEO Richard P. Wallace sold 87,568 shares of the company's stock in a transaction that occurred on Tuesday, August 11th. The shares were sold at an average price of $198.95, for a total value of $17,421,653.60. Following the transaction, the chief executive officer directly owned 778,944 shares of the company's stock, valued at $154,970,908.80. This trade represents a 10.11% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last 90 days, insiders sold 243,339 shares of company stock valued at $46,903,454. Corporate insiders own 79.39% of the company's stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Wellington Management Group LLP increased its position in KLA by 928.9% in the second quarter. Wellington Management Group LLP now owns 14,821,622 shares of the semiconductor company's stock worth $4,471,832,000 after buying an additional 13,381,153 shares during the period. Bank of New York Mellon Corp acquired a new position in shares of KLA during the second quarter valued at $2,522,430,000. National Pension Service grew its position in shares of KLA by 899.4% during the second quarter. National Pension Service now owns 3,634,859 shares of the semiconductor company's stock worth $1,096,673,000 after acquiring an additional 3,271,158 shares during the last quarter. NEOS Investment Management LLC grew its position in shares of KLA by 987.0% during the second quarter. NEOS Investment Management LLC now owns 979,371 shares of the semiconductor company's stock worth $295,486,000 after acquiring an additional 889,269 shares during the last quarter. Finally, Railway Pension Investments Ltd increased its holdings in shares of KLA by 960.4% in the 2nd quarter. Railway Pension Investments Ltd now owns 926,652 shares of the semiconductor company's stock worth $279,580,000 after acquiring an additional 839,265 shares during the period. Institutional investors and hedge funds own 86.65% of the company's stock.

About KLA

KLA Corporation NASDAQ: KLAC develops process-control and yield-management solutions used by semiconductor and electronics manufacturers. Its systems help customers detect defects, measure and analyze materials and structures, and monitor manufacturing processes throughout the production of integrated circuits and other advanced electronic components.

The company's product portfolio includes inspection and metrology systems, wafer and reticle inspection equipment, process-control software, data analytics tools, and related services.

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