KLAC
KLA Corporation
Semiconductors
★ Quality 83/100Price today
$216.19
what the market pays
Worth
$50.62
calculated cycle value
Price is 327% above its value
charlieapp.co
A monopoly position
This company has a competitive advantage so strong that its rivals find it practically impossible to replicate.
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
5-year cycle
Money made year by year
This business has cycles — good years and bad years. That's why we don't use just the last year.
We use the average of those 5 years as the base for the math — not the good year, not the bad year. That way the value reflects what the company makes steadily.
How many times the cash flow
Semiconductors · vs 11 peers
You pay 98.4x times this business's cash flow; its sector median is 58.2x.
76% above what Charlie thinks it's worth (24x) — you're overpaying, sector or no sector.
Why Overvalued?
The model estimates an intrinsic value of $50.62 per share. Today's price of $216.19 is 77% above the calculated value — the market is paying a premium over what the model sees as fair.
The price is 327% above the calculated value. You're paying more than it's worth.
Buying here lowers your expected return and wipes out the safety margin.
The next reasonable entry zone starts at $48.09.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$40.50
-20% off Value
🟡 Discounted
≤$48.09
-5% off Value
🔴 Today
$216.19
-77% Valor
Overvalued
The market prices it too high versus what the business makes. Patience pays off here.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
— Warren Buffett
Model updated · July 2026
The business
KLA is the quality control that sees the invisible defects in the chip.
KLA dominates process control in semiconductor manufacturing: inspection, metrology, and defect detection on wafers. It sells capital equipment to the fabs (TSMC, Samsung, Intel) and then charges recurring maintenance services on the installed base. In FY2025 it billed $12.2B with a 61% gross margin.
It controls more than 50% of the process control market, a category where a nanometer error costs millions in lost wafers. The fab doesn't switch suppliers on a whim: there are decades of calibrated data and accumulated software. The services business grows with every tool sold and is hard to displace.
Revenue history
From $6.9B to $12.2B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $12.2B · FY2025
Of every $100 in sales, $67 goes to costs and operations; $33 is left as net profit (33% margin).
Catalysts and risks
The transition to advanced nodes (2nm, gate-all-around) demands more inspection steps per wafer, increasing process control intensity.
Fab construction funded by the CHIPS Act and global expansion through 2027 widens the installed base.
Recurring services business growing double digits, already over $2.5B annually, smooths out the cycle.
It's Semi-Cyclical: when fabs cut capex, equipment orders drop fast and hard.
Export restrictions to China can close off a market that has accounted for 25-40% of revenue.
Debt of $5.9B against cash of $2.1B — manageable, but demands discipline if the cycle turns.
Charlie's note
“It sells the picks and shovels for the most expensive mine in the world, and then charges a toll to keep them sharp. The cycle will give you the scare; the moat pays you to hold through it.”
Analysis · June 2026
So when would be a good price for KLA Corporation?
By our calculation, not yet. We will email you the day it drops to $48.09 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.