KLA Corporation (KLAC): investment thesis checklist
What a value investor writing down why they own KLA Corporation would be relying on, read from its filings: the figures that have carried the business, the lines a reader might set on them, and the published tests it meets today. A list to write against, not a view on the company.
1. The figures the case would rest on
- Return on invested capital: 49.7% in FY2025; between 27.3% and 52.7% over 6 filed years, median 45.0%. Does the thesis need it to stay inside that range?
- Return on equity: 76.1% in FY2026; between 44.2% and 237.0% over 10 filed years, median 72.9%. Does the thesis need it to stay inside that range?
- Free cash flow yield: 0.9% in FY2026; between 0.9% and 7.2% over 10 filed years, median 5.1%. Does the thesis need it to stay inside that range?
- EV to EBIT: 25.03x in FY2025; between 14.67x and 33.45x over 6 filed years, median 21.62x. Does the thesis need it to stay inside that range?
- Price to earnings: 82.43x in FY2026; between 14.56x and 82.43x over 10 filed years, median 22.18x. Does the thesis need it to stay inside that range?
- Gross margin: 61.3% in FY2026; between 57.8% and 64.2% over 10 filed years, median 60.4%. Does the thesis need it to stay inside that range?
- Revenue growth, 5-year CAGR: 14.4% in FY2026; between 1.9% and 21.5% over 10 filed years, median 15.8%. Does the thesis need it to stay inside that range?
- Share count change: -1.3% in FY2026; between -7.5% and 0.7% over 10 filed years, median -1.5%. Does the thesis need it to stay inside that range?
2. What must stay true: guardrails a reader might set
Each line is drafted from KLA Corporation's own current figure, never from a level we think a business should clear, and replayed over its filed years. They are a reader's to keep, edit or drop.
Revenue Growth 1Y stays at or above 0%
Today 11.71%. Replayed over 10 filed years, it would have broken in 1; most recently FY2024, at -6.51% (10-K, filed 2024-08-05).
Current Ratio stays at or above 2.3x
Today 2.88x. Replayed over 11 filed years, it would have broken in 2; most recently FY2024, at 2.15x (10-K, filed 2024-08-05).
Dividend Rate stays at or above $0.91
Today $0.92. This indicator depends on inputs (market price, multi-statement composites) whose history is not deep enough to re-derive it with the same formula as the live value, so no honest retro-test exists for it.
3. What would break it
- A filed year in which revenue growth 1y fell below 0%.
- A filed year in which current ratio fell below 2.3x.
- A filed year in which dividend rate fell below $0.91.
4. The published tests it meets today
Of 30 tests value investors published: 2 met, 22 not met, 6 we could not complete. Counts, never a score.
Meets: High return on tangibles; Cash-covered dividend.
What this cannot tell you
What the numbers say today, not the day one stops being true. The reasons are not written down.
An account adds
One email the night a number you wrote down breaks. Silence otherwise.
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How this is computedA computation on accounts filed with the SEC, not a recommendation and not advice. Past filings do not indicate future results. Risk disclaimer.