Is KLA Corp. overvalued or undervalued?

As of 10 September 2025, KLA Corp. has moved from a very attractive to an attractive valuation grade. The company appears to be overvalued, given its high P/E ratio of 51, a Price to Book Value of 52.03, and an EV to EBITDA of 40.07, which are significantly above industry averages. In comparison, Emerson Electric Co. has a P/E of 48.44, indicating that KLA Corp. is priced at a premium relative to its peers.
Despite its strong performance metrics, such as a remarkable ROE of 101.85% and a ROCE of 82.15%, the elevated valuation ratios suggest that the stock may not have much room for further appreciation. Over the past year, KLA Corp. has returned 43.18%, outperforming the S&P 500's 17.14% return, which reinforces the notion that while the stock has performed well, its current valuation may not be justified in the long term.