In the rapidly evolving semiconductor industry, KLA Corporation (KLAC) and Nova Ltd. (NVMI) stand out as pivotal players, each with unique strengths and strategies. Both companies focus on process control technologies essential for semiconductor manufacturing, but they differ in their innovation approaches and market segments. As I delve into their financial health, growth potential, and overall market presence, I aim to help you, the investor, identify which company presents the most compelling opportunity for your portfolio.
Table of contents
Company Overview
KLA Corporation Overview
KLA Corporation (NASDAQ: KLAC) is a premier provider of process control and yield management solutions for the semiconductor and electronics industries globally. Established in 1975 and headquartered in Milpitas, California, KLA operates across four segments: Semiconductor Process Control, Specialty Semiconductor Process, PCB, Display, and Component Inspection, and Other. The company’s extensive product offerings include advanced metrology and inspection systems that enable manufacturers to optimize the production of integrated circuits. With a market capitalization of approximately $154.4B, KLA’s robust solutions are pivotal in enhancing yield and process efficiency, thereby solidifying its position as a leader in the semiconductor sector.
Nova Ltd. Overview
Nova Ltd. (NASDAQ: NVMI), founded in 1993 and based in Rehovot, Israel, specializes in designing and producing process control systems used in semiconductor manufacturing. The company’s product range includes metrology platforms that facilitate critical measurements across various manufacturing processes, such as lithography and chemical mechanical planarization. Nova’s focus on technological innovation has earned it a strong reputation among integrated circuit manufacturers and process equipment suppliers worldwide. With a market cap of around $9.23B, Nova continues to expand its influence in the semiconductor industry by offering specialized solutions that address the evolving needs of its clients.
Key similarities and differences
Both KLA Corporation and Nova Ltd. are key players in the semiconductor industry, focusing on process control and yield management. While KLA offers a broader range of solutions across various segments, Nova specializes more specifically in metrology platforms. Additionally, KLA boasts a significantly larger market capitalization and workforce compared to Nova, reflecting its established presence in the market.
Income Statement Comparison
The following table compares the most recent income statements of KLA Corporation and Nova Ltd. to provide insights into their financial performance.
| Metric | KLA Corporation | Nova Ltd. |
|---|---|---|
| Market Cap | 154.45B | 9.23B |
| Revenue | 12.16B | 672.40M |
| EBITDA | 5.34B | 204.92M |
| EBIT | 4.95B | 187.54M |
| Net Income | 4.06B | 183.76M |
| EPS | 30.53 | 6.31 |
| Fiscal Year | 2025 | 2024 |
Interpretation of Income Statement
KLA Corporation has demonstrated significant growth in revenue and net income with a remarkable increase from 9.81B to 12.16B (approximately 24% growth) and from 2.76B to 4.06B (approximately 47% growth) respectively. This resulted in improved margins, with EBITDA and EBIT margins reflecting robust operational efficiency. In contrast, Nova Ltd. showed a moderate revenue increase from 517.92M to 672.40M, and net income growth was stable, suggesting consistent performance. The disparity in scale between the two companies indicates KLA Corporation’s stronger market position and operational capabilities within the semiconductor sector.
Financial Ratios Comparison
In the table below, I present a comparative analysis of the most recent revenue and financial ratios for KLA Corporation (KLAC) and Nova Ltd. (NVMI). This will help you assess their financial health and performance.
| Metric | KLAC | NVMI |
|---|---|---|
| ROE | 86.56% | 19.81% |
| ROIC | 38.11% | 13.39% |
| P/E | 29.34 | 31.20 |
| P/B | 25.39 | 6.18 |
| Current Ratio | 2.62 | 2.32 |
| Quick Ratio | 1.83 | 1.92 |
| D/E | 1.30 | 0.25 |
| Debt-to-Assets | 37.89% | 16.98% |
| Interest Coverage | 17.16 | 116.20 |
| Asset Turnover | 0.76 | 0.48 |
| Fixed Asset Turnover | 9.70 | 5.06 |
| Payout Ratio | 22.27% | 0% |
| Dividend Yield | 0.76% | 0% |
Interpretation of Financial Ratios
KLA Corporation exhibits strong financial ratios, particularly in return metrics (ROE and ROIC), indicating excellent profitability and efficiency. The high interest coverage suggests robust ability to meet debt obligations. In contrast, Nova Ltd. is more conservatively leveraged, with lower debt ratios and no dividend payouts, which may indicate a focus on growth reinvestment. However, its lower ROE and ROIC suggest less efficiency in generating returns compared to KLA. Investors should weigh these factors based on their risk appetite and investment strategy.
Dividend and Shareholder Returns
KLA Corporation (KLAC) maintains a dividend payout ratio of approximately 22.8%, with a dividend yield of 0.76% and a steady annual dividend per share of $6.80. This indicates a sustainable distribution, supported by robust free cash flow. Conversely, Nova Ltd. (NVMI) does not pay dividends, reflecting a strategic choice to reinvest earnings for growth. While it engages in share buybacks, this approach could align with long-term shareholder value creation, provided it effectively enhances operational performance. Overall, KLAC’s dividends reinforce its commitment to shareholder returns, while NVMI’s strategy hinges on future growth potential.
Strategic Positioning
KLA Corporation (KLAC) dominates the semiconductor process control market with a substantial market share, leveraging its advanced technologies and robust product portfolio. Competing against Nova Ltd. (NVMI), which focuses on metrology systems, KLAC faces competitive pressure but maintains a strong position due to its comprehensive solutions. Technological disruptions, such as advancements in AI and automation, may challenge both companies, but their commitment to innovation is critical in navigating this evolving landscape.
Stock Comparison
In this section, I will analyze the stock price movements of KLA Corporation (KLAC) and Nova Ltd. (NVMI) over the past year, highlighting significant price changes and trading dynamics.
Trend Analysis
KLA Corporation (KLAC) has exhibited a remarkable price change of +115.96% over the past year, indicating a bullish trend. The stock has demonstrated acceleration, with notable highs reaching 1208.74 and lows at 544.31. The standard deviation of 148.89 suggests a higher level of volatility, which could present both opportunities and risks for investors.
In the recent period from September 14, 2025, to November 30, 2025, KLAC’s stock price increased by +21.93%, with a standard deviation of 76.72. This performance further solidifies its bullish trend.
Nova Ltd. (NVMI) has also shown strong performance, with a price change of +141.91% over the past year, categorizing it as bullish as well. However, the trend is experiencing deceleration, with highs of 345.06 and lows of 129.32. The standard deviation of 48.52 indicates relatively lower volatility compared to KLAC.
From September 14, 2025, to November 30, 2025, NVMI’s stock price increased by +6.73%, reflecting a neutral trend in recent weeks due to the trend slope of -0.39.
In summary, both KLAC and NVMI are on a bullish trajectory over the long term, but KLAC exhibits stronger momentum and volatility compared to NVMI.
Analyst Opinions
Recent analyst recommendations for KLA Corporation (KLAC) indicate a “Buy” rating, primarily due to strong return on equity and assets, with analysts highlighting its robust financial health. Nova Ltd. (NVMI) also carries a “Buy” rating, supported by solid overall performance and a favorable debt-to-equity ratio. Analysts suggest both companies are well-positioned for growth despite market fluctuations. The consensus for the current year remains a “Buy” for both stocks, reflecting positive sentiment in the semiconductor industry.
Stock Grades
Recent stock ratings provide valuable insights for investors looking to make informed decisions. Below are the latest grades for KLA Corporation and Nova Ltd., as assessed by reputable grading companies.
KLA Corporation Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Citigroup | maintain | Buy | 2025-10-31 |
| Goldman Sachs | maintain | Neutral | 2025-10-30 |
| TD Cowen | maintain | Hold | 2025-10-30 |
| Needham | maintain | Buy | 2025-10-30 |
| UBS | maintain | Neutral | 2025-10-30 |
| Wells Fargo | maintain | Equal Weight | 2025-10-30 |
| JP Morgan | maintain | Overweight | 2025-10-30 |
| Cantor Fitzgerald | maintain | Neutral | 2025-10-30 |
| Barclays | maintain | Overweight | 2025-10-30 |
| Evercore ISI Group | maintain | Outperform | 2025-10-30 |
Nova Ltd. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Evercore ISI Group | maintain | Outperform | 2025-11-07 |
| Benchmark | maintain | Buy | 2025-11-07 |
| B of A Securities | maintain | Buy | 2025-06-24 |
| Cantor Fitzgerald | maintain | Overweight | 2025-06-24 |
| Citigroup | maintain | Buy | 2025-05-09 |
| Benchmark | maintain | Buy | 2025-05-09 |
| B of A Securities | maintain | Buy | 2025-04-16 |
| Cantor Fitzgerald | maintain | Overweight | 2025-03-14 |
| Benchmark | maintain | Buy | 2025-02-14 |
| Needham | maintain | Hold | 2025-02-14 |
Overall, both KLA Corporation and Nova Ltd. have received a mix of grades, with KLA showing stability in its ratings from multiple firms, while Nova Ltd. maintains a generally positive outlook with several “Buy” ratings. Investors should consider these insights carefully when evaluating their investment strategies.
Target Prices
The target consensus indicates a positive outlook for both KLA Corporation and Nova Ltd.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| KLA Corporation | 1400 | 1154 | 1286.29 |
| Nova Ltd. | 224 | 210 | 217 |
KLA Corporation’s consensus target of 1286.29 suggests a potential upside from its current price of 1175.47, while Nova Ltd.’s target of 217 is also above its current price of 312.84, indicating optimism from analysts for both companies.
Strengths and Weaknesses
The following table summarizes the strengths and weaknesses of KLA Corporation (KLAC) and Nova Ltd. (NVMI) based on the most recent data.
| Criterion | KLA Corporation (KLAC) | Nova Ltd. (NVMI) |
|---|---|---|
| Diversification | High | Moderate |
| Profitability | Strong (33.4% net margin) | Moderate (27.3% net margin) |
| Innovation | Leading in semiconductor tech | Growing in metrology |
| Global presence | Extensive | Strong in Asia |
| Market Share | 10% | 5% |
| Debt level | Moderate (38% debt to assets) | Low (17% debt to assets) |
Key Takeaways: KLA Corporation shows robust profitability and market share, while Nova Ltd. maintains a strong global presence and low debt levels. Investors should weigh these factors based on their risk appetite and investment strategy.
Risk Analysis
In this section, I present a concise table outlining the various risks associated with KLA Corporation (KLAC) and Nova Ltd. (NVMI).
| Metric | KLA Corporation (KLAC) | Nova Ltd. (NVMI) |
|---|---|---|
| Market Risk | Medium | High |
| Regulatory Risk | Medium | Medium |
| Operational Risk | Low | Medium |
| Environmental Risk | Low | Low |
| Geopolitical Risk | Medium | Medium |
Both companies are exposed to market and geopolitical risks, particularly in the semiconductor industry, where fluctuations in demand and regulatory changes can significantly impact performance. Recent supply chain disruptions and international trade tensions have heightened these risks, making prudent assessment essential.
Which one to choose?
When comparing KLA Corporation (KLAC) and Nova Ltd. (NVMI), both companies demonstrate solid fundamentals, yet their performance metrics reveal distinct characteristics. KLAC has a higher market cap at approximately $119B, with a strong gross profit margin of 62.3% and a net profit margin of 33.4%. Its stock trend is bullish, reflecting a price increase of 115.96% over the past year. Conversely, NVMI, with a market cap of about $5.7B, also shows impressive growth with a 141.91% price increase, yet it faces a deceleration in its recent trend.
Analyst ratings favor NVMI slightly with a B+ compared to KLAC’s B, hinting at better growth potential for risk-tolerant investors. However, KLAC’s financial stability and higher profitability margins may appeal to conservative investors.
Recommendation: Investors focused on growth may prefer NVMI, while those prioritizing stability and profitability might favor KLAC.
Both companies face risks including market dependence and competition in the semiconductor sector.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of KLA Corporation and Nova Ltd. to enhance your investment decisions:
