DCF Studio

    KLAC · NMS · Technology

    KLA Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 99.84

    Market price

    USD 153.11

    Implied upside

    -34.8%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2026-06-30

    Current EV/EBITDA of 33.2x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 99.84-34.8%
    Exit multiple
    USD 159.49+4.2%
    Market price
    USD 153.11

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn7bn14bnFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36CAGR
    RevenueUSD 18.9bnUSD 22.3bnUSD 26.0bnUSD 29.7bnUSD 33.4bnUSD 36.9bnUSD 40.0bnUSD 42.5bnUSD 44.4bnUSD 45.6bn+10.3%
    EBITUSD 7.5bnUSD 8.8bnUSD 10.3bnUSD 11.7bnUSD 13.2bnUSD 14.6bnUSD 15.8bnUSD 16.8bnUSD 17.6bnUSD 18.0bn+10.3%
    NOPATUSD 6.5bnUSD 7.7bnUSD 8.9bnUSD 10.2bnUSD 11.5bnUSD 12.7bnUSD 13.7bnUSD 14.6bnUSD 15.3bnUSD 15.7bn+10.3%
    Add depreciation & amortisationUSD 669.8mUSD 792.3mUSD 921.7mUSD 1.1bnUSD 1.2bnUSD 1.3bnUSD 1.4bnUSD 1.5bnUSD 1.6bnUSD 1.6bn+10.3%
    Less capital expenditureUSD -547.8mUSD -717.6mUSD -915.7mUSD -1.1bnUSD -1.4bnUSD -1.6bnUSD -1.9bnUSD -2.2bnUSD -2.4bnUSD -2.6bn+18.9%
    Capex, % of revenue2.9%3.2%3.5%3.8%4.1%4.5%4.8%5.1%5.4%5.7%-
    Less increase in working capitalUSD -2.2bnUSD -1.5bnUSD -1.5bnUSD -1.6bnUSD -1.6bnUSD -1.5bnUSD -1.3bnUSD -1.1bnUSD -807.4mUSD -471.2m-15.9%
    Free cashflow to firmUSD 4.4bnUSD 6.3bnUSD 7.4bnUSD 8.5bnUSD 9.7bnUSD 10.9bnUSD 11.9bnUSD 12.9bnUSD 13.7bnUSD 14.2bn+14.0%
    Discount factor0.95190.86260.78170.70830.64180.58160.52700.47760.43280.3922-
    Present valueUSD 4.2bnUSD 5.4bnUSD 5.8bnUSD 6.1bnUSD 6.2bnUSD 6.3bnUSD 6.3bnUSD 6.2bnUSD 5.9bnUSD 5.6bn-
    Present Value Of The ForecastUSD 57.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.333Reported 1.497, pulled toward 1.0 (Blume)
    Cost of equity10.53%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 19.9x interest cover. Book interest / average debt was lower, at 4.6%.
    Market capitalisationUSD 199.5bn97.0% of capital
    Total debtUSD 6.2bn3.0% of capital, book value as a proxy
    Tax rate13.0%Effective, capped at statutory
    WACC10.36%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 99.84

    56% of EV

    Forecast FCFF, final year
    USD 14.2bn
    Capex at depreciation, working capital in reinvestment
    USD 15.7bn
    Less reinvestment at g/ROIC (6.3% of NOPAT)
    USD -982.4m
    Capitalised
    USD 14.7bn
    ROIC (reported)
    39.9%
    Terminal value, undiscounted
    USD 191.5bn
    Terminal value, discounted
    USD 75.1bn
    Enterprise value
    USD 133.0bn
    Less net debt
    USD 1.2bn
    Equity value
    USD 131.7bn

    Exit at 20.0x EBITDA

    Value per shareUSD 159.49

    73% of EV

    Terminal value, undiscounted
    USD 392.3bn
    Terminal value, discounted
    USD 153.8bn
    Enterprise value
    USD 211.7bn
    Less net debt
    USD 1.2bn
    Equity value
    USD 210.5bn

    Spread between methods: 46%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    8.36%126.96132.10138.17145.43154.25
    9.36%108.84112.23116.16120.75126.17
    10.36%94.9197.2199.84102.86106.36
    11.36%83.8985.4887.2889.3291.66
    12.36%74.9776.0877.3378.7480.34

    Outlined: this model. Green text: above today's price of 153.11. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year9.0%12.9%18.6%
    EBIT margin41.7%39.5%59.1%
    Discount rate-10.4%7.8%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.