Why KLA (KLAC) is a Top Value Stock for the Long-Term

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to highlight the most attractive and discounted stocks.

KLA (KLAC)

San Jose, CA-based KLA Corporation is an original equipment manufacturer (OEM) of process diagnostics and control (PDC) equipment and yield management solutions required for the fabrication of semiconductor integrated circuits (ICs) or chips. The company has a comprehensive portfolio of products addressing each major PDC subsegment—photomask (reticle) inspection, wafer inspection/defect review and metrology.

KLAC is a Zacks Rank #3 (Hold) stock, with a Value Style Score of B and VGM Score of B. Shares are currently trading at a forward P/E of 14.6X for the current fiscal year compared to the Electronics - Miscellaneous Products industry's P/E of 16.3X. Additionally, KLAC has a PEG Ratio of 1.2 and a Price/Cash Flow ratio of 14.4X. Value investors should also note KLAC's Price/Sales ratio of 5.6X.

Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Six analysts revised their earnings estimate upwards in the last 60 days for fiscal 2023. The Zacks Consensus Estimate has increased $0.42 to $24.87 per share. KLAC has an average earnings surprise of 5.1%.

With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding KLAC to their portfolios.

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