KLA Corp. (NASDAQ:KLAC)

The financial ratios for KLA Corp. over the six-year period reveal several notable trends and fluctuations that provide insight into market valuation relative to earnings, operating profit, sales, and book value.

Price to earnings (P/E) ratio

The P/E ratio exhibited variability, beginning at 18.44 in mid-2019 and increasing sharply to a peak of 25.97 in 2021. It then dropped to its lowest point in the period at 16.89 in 2022, followed by an increase to 20.04 in 2023 and a significant rise to 34.24 in 2024. This pattern suggests fluctuating investor sentiment and varying earnings performance or expectations, with the most recent ratio indicating heightened market optimism or potentially reduced earnings relative to price.

Price to operating profit (P/OP) ratio

Similar to the P/E ratio, the P/OP ratio rose from 15.6 in 2019 to 21.69 in 2021, indicating increased valuation relative to operating profit. It decreased to 15.36 in 2022 before climbing again to 16.99 in 2023 and then more sharply to 28.26 in 2024. This volatility mirrors that seen with the P/E ratio, reflecting changes in market perceptions of the company's operating profitability and potentially adjustments in profit margins or operational efficiency.

Price to sales (P/S) ratio

The P/S ratio showed a consistent upward trend from 4.74 in 2019 to 7.8 in 2021, indicating increasing valuation relative to sales. After a dip to 6.09 in 2022, it resumed its upward trend to 6.47 in 2023 and reached a high of 9.64 in 2024. This generally positive trend suggests growing investor confidence in revenue generation or the premium placed on sales growth potential in recent years.

Price to book value (P/BV) ratio

The P/BV ratio demonstrated the most pronounced fluctuations. Starting at 8.15 in 2019, it increased markedly to 15.98 in 2021, then surged dramatically to 40.05 in 2022. This was followed by a sharp decrease to 23.25 in 2023 and a moderate rise to 28.07 in 2024. Such volatility may indicate significant changes in book value, investor expectations regarding asset quality, or accounting adjustments affecting book value. The sharp peak in 2022 warrants further investigation into possible extraordinary items or revaluations during that period.

Overall, the data reveals a general trend of increasing valuation multiples with intermittent periods of correction or stabilization. The surge in ratios in 2024 across most metrics signals heightened market valuation, which may reflect increased investor confidence or bullish expectations despite prior fluctuations. The considerable volatility, especially in the price to book value ratio, suggests dynamic shifts in either the company's fundamentals or market perception over the analyzed timeframe.

Share Price

The share price demonstrated a consistent upward trend over the six-year period. Starting at $136.12 in June 2019, it rose substantially each year, reaching $703.48 by June 2024. This represents more than a fivefold increase, indicating strong market confidence and growth expectations for the company.

Earnings per Share (EPS)

The EPS showed an overall increase from $7.38 in June 2019 to a peak of $24.78 in June 2023, nearly tripling over the four years. However, in June 2024, EPS declined to $20.55. Despite this recent decrease, the EPS remains significantly higher than the initial value in 2019, suggesting an overall enhancement in profitability with some volatility in the latest period.

Price to Earnings (P/E) Ratio

The P/E ratio fluctuated throughout the period. It started at 18.44 in 2019 and then increased to around 26 in 2020 and 2021, indicating rising market valuations relative to earnings. It decreased notably to 16.89 in 2022, concurrent with a strong increase in EPS, suggesting that earnings growth outpaced share price increases that year. In 2023, the ratio rose slightly to 20.04 and then sharply increased to 34.24 in 2024, despite the decline in EPS. This suggests that the market maintained or enhanced its optimistic valuation of the company even as earnings temporarily weakened.

Share Price

The share price has exhibited a consistent upward trajectory over the observed period. Starting at $136.12 in mid-2019, it has steadily increased each year, reaching $703.48 by mid-2024. This reflects a strong growth trend, with the most significant year-over-year gains occurring in the later years, signaling robust market confidence or improved company prospects.

Operating Profit Per Share

Operating profit per share showed gradual improvement from $8.72 in mid-2019 to a peak of $29.22 in mid-2023. However, there is a slight decline to $24.89 in mid-2024. This pattern suggests an overall increase in operational efficiency or profitability over the five years, though the decrease in the final year may indicate emerging challenges or changes in operational conditions.

Price to Operating Profit Ratio (P/OP)

The P/OP ratio fluctuated notably throughout the period. It increased from 15.6 in 2019 to a high of 21.69 in 2021, indicating growing investor willingness to pay more for each unit of operating profit. A decline followed to 15.36 in 2022, before rising again to 28.26 in 2024. The sharp increase in 2024 suggests the share price growth outpaced the operating profit per share, possibly reflecting heightened investor expectations or valuation adjustments despite the recent dip in operating profit.

Share Price

The share price exhibited a consistent upward trend over the analyzed period, rising from $136.12 in mid-2019 to $703.48 by mid-2024. Notably, the largest absolute increases occurred in the last two years, reflecting strong market confidence or improved company performance.

Sales per Share

Sales per share increased steadily from $28.69 in 2019 to a peak of $76.77 in 2023, indicating growth in revenue generation per outstanding share. However, in 2024, there was a slight decline to $72.99, suggesting a minor decrease in sales efficiency or revenue.

Price-to-Sales (P/S) Ratio

The P/S ratio generally trended upward, moving from 4.74 in 2019 to 9.64 in 2024. This increase implies that the market valuation of the company relative to its sales strengthened significantly, especially in the last year. There were fluctuations during the period, with a dip in 2022 before rising again, indicating market sentiment and valuation multiples changed over time.

The financial data exhibits several notable trends over the analyzed periods, specifically from June 30, 2019, through June 30, 2024.

Share Price

The share price shows a strong upward trajectory over the years. Beginning at $136.12 in 2019, the price more than doubled each year in the earlier periods, reaching $202.85 in 2020 and $353.35 in 2021. This growth continued in subsequent years, with an increase to $395.74 in 2022, $496.47 in 2023, and culminating at $703.48 in 2024. The persistent increase indicates strong market confidence and positive investor sentiment.

Book Value per Share (BVPS)

BVPS displays some fluctuations, starting at $16.70 in 2019 and increasing slightly to $17.15 in 2020 and more notably to $22.11 in 2021. However, there is a significant decline in 2022, where BVPS drops sharply to $9.88. After this dip, the BVPS recovers over the next two years, rising to $21.36 in 2023 and $25.06 in 2024, surpassing the earlier highs before the decline. This volatility may reflect exceptional events or accounting adjustments impacting book value during the period.

Price-to-Book Value Ratio (P/BV)

The P/BV ratio exhibits pronounced variability, beginning at 8.15 in 2019 and increasing steadily through 11.83 in 2020 and 15.98 in 2021. In 2022, the ratio peaks sharply at 40.05, coinciding with the substantial drop in BVPS, which elevates the market price relative to book value. Subsequently, the ratio decreases but remains elevated, at 23.25 in 2023 and rising again to 28.07 in 2024. This pattern suggests that the market's valuation of the company relative to its book value has increased markedly, despite fluctuations in BVPS, potentially reflecting expectations of future growth or intangible asset valuation.

Overall, the company exhibits a strong growth pattern in market valuation, as evidenced by the rising share price and elevated P/BV ratios. Despite significant fluctuations in book value per share, particularly the notable drop in 2022, the market appears to maintain a high valuation relative to book value, implying confidence in future prospects or underlying assets not fully captured in the book value.