KLIC's Enterprise Value to Gross Margin ratio is close to 1. That is what I call dirt cheap. The really blue chip tech growth companies sport EV/GM ratio of 4-5. A good but not super tech will typically sport an EV/GM ratio of 3 or so.
I would think KLIC is deserving of a ratio in that range. That tells me the stock should be worth about $25-30 per share.
Let's see what you get if you instead use Enterprise Value to Earnings ratio. EV is about 350 mil. With about 75 mil shares outstanding that's an EV of about $5 per share.
Projected earnings on Yahoo shows $1.45. Considering the good quarterly that projection that predates this new quarterly ought to be a conservative estimate of profits.
So EV/E ratio is conservatively something like 3.5. An EV/E ratio of 12 ought to be reasonable. (for those who are used to using PE ratio, EV/E is simply PE ratio after backing out net cash from market cap)
This would put the stock at something like $35 per share.
Note that my estimates are based on backing out cash and because they have so much cash it leads to very lofty estimates of what this stock is worth.
If you don't believe in backing out cash then you may conclude this stock is only worth perhaps $15 per share. But in my opinion, it does not make sense to ignore a company's net cash when estimating what the stock should be worth.
KLIC is currently priced with a rear view mentality. Demand has clearly turned the corner and copper is rockin'. Take out the giant cash balance and you have a stock that is priced for almost no growth.
I'm not too worried about the cash balance. It was just mentioned on the call that management is looking at growth opportunities. They are taking their time and will deploy cash at high rates of return no doubt.