KLA stock forecast
KLA's weighted forecast is US$164.99 in October 2027, a 13% loss including dividends, and US$205.55 in October 2029, a 10% gain. It hinges on packaging growth, cash conversion and how much valuation KLA retains.
Where could KLA's shares be by 2029?
The weighted forecast is US$164.99 in October 2027, a 13% loss including dividends, and US$205.55 in October 2029, a 10% gain. The cases assign 30% probability to bear, 50% to base and 20% to bull.
| Case | Probability | October 2027 | October 2028 | October 2029 |
|---|---|---|---|---|
| Bear | 30 % | 104.02 (-45 %) | 101.19 (-46 %) | 105.17 (-43 %) |
| Base | 50 % | 171.27 (-9 %) | 190.12 (+1 %) | 204.32 (+10 %) |
| Bull | 20 % | 240.76 (+27 %) | 294.87 (+57 %) | 359.20 (+92 %) |
| Weighted | 100 % | 164.99 (-13 %) | 184.39 (-2 %) | 205.55 (+10 %) |
What does KLA need to get right, and what could go wrong?
The base uses the 38.6% five-year margin because FY2026’s 41.7% margin may be above-cycle. Service represented about 23% of FY2026 revenue, with about 80% of service revenue contract-based, while advanced-packaging process-control revenue was forecast at $1.1 billion for calendar 2026, up 70%. The bear case reflects China exposure, a possible fab pause and weaker utilization; the bull case assumes packaging wins and new capacity convert demand into shipments.
How much cash does KLA really make?
Free cash flow subtracts capital spending from operating cash. KLA’s physical capital needs are modest because it sells equipment to factories rather than operating those factories, but research, development and service employees are already paid through operating expenses. The simple free-cash-flow measure was therefore nearly flat year on year, and its margin on revenue declined over the five-year period.
Stock compensation requires another adjustment. KLA adds stock pay back to operating cash because no current cash leaves the company, but existing owners bear dilution unless repurchases offset it. Deducting stock pay produces an analytical “real free cash flow” measure. It is not KLA’s own definition, and stock compensation should not be deducted twice.
| Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | |
|---|---|---|---|---|---|
| Cash from operations | 4,143,079 | 4,081,903 | 3,308,575 | 3,669,805 | 3,312,702 |
| − Capital spending | 375,945 | 340,209 | 277,384 | 341,591 | 307,320 |
| = Free cash flow | 3,767,134 | 3,741,694 | 3,031,191 | 3,328,214 | 3,005,382 |
| − Stock pay | 310,171 | 265,011 | 212,695 | 171,424 | 126,918 |
| = Real free cash flow | 3,456,963 | 3,476,683 | 2,818,496 | 3,156,790 | 2,878,464 |
| Real free cash flow, % of revenue | 25.5% | 28.6% | 28.7% | 30.1% | 31.2% |
What does an investor pay for KLA today?
The low free-cash-flow yield means the buyer receives little current cash relative to the purchase price. The dividend yield is smaller still, and dividends are only one use of the cash KLA generates. The price therefore depends heavily on what comes next.
| Today (Oct 12, 2026) | |
|---|---|
| Share price | 189.75 |
| P/E, last 12 months (calculated) | 51.7x |
| P/E, next 12 months (calculated) | 27.9x |
| Free cash flow yield (calculated) | 1.5% |
| Real free cash flow yield (calculated) | 1.4% |
| Dividend yield (calculated) | 0.5% |