KLA Corporation (NASDAQ:KLAC) defied analyst predictions to release its quarterly results, which were ahead of market expectations. The company beat expectations with revenues of US$2.8b arriving 3.0% ahead of forecasts. Statutory earnings per share (EPS) were US$7.01, 3.5% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the 27 analysts covering KLA are now predicting revenues of US$11.5b in 2025. If met, this would reflect a notable 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 32% to US$29.24. In the lead-up to this report, the analysts had been modelling revenues of US$11.4b and earnings per share (EPS) of US$28.84 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$812, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic KLA analyst has a price target of US$950 per share, while the most pessimistic values it at US$670. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 17% growth on an annualised basis. That is in line with its 15% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 18% annually. It's clear that while KLA's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$812, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on KLA. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple KLA analysts - going out to 2027, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for KLA that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
