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Keysight Technologies Inc KEYS

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Stock XNYS Rating as of
$144.05 +0.21 (0.15%)
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Company Report

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Keysight Earnings: Softer Demand Continues, and We Maintain Our Long-Term Thesis

William Kerwin

We maintain our $157 fair value estimate for shares of wide-moat Keysight Technologies as we believe our long-term thesis is intact after the firm reported fiscal second-quarter results. Keysight continues to see weaker demand across its served markets, led by commercial communications. We expect soft results through the fiscal year and a multiyear rebound across fiscal 2025 and 2026. Fiscal second-quarter results were slightly above our expectations, while fiscal third-quarter guidance was modestly below our model. Overall, our view on Keysight’s longer-term opportunity is unchanged. We continue to see the firm as well-positioned with a comprehensive communications testing portfolio and good adjacent opportunities in cars and semiconductors. We see shares as fairly valued.

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Price vs Fair Value

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KEYS is trading at a 380% premium.
Price
$144.05
Fair Value
$843.00
Uncertainty
Medium
1-Star Price
$413.37
5-Star Price
$365.60
Economic Moat
Ltlr
Capital Allocation
Cfykdgrxc

Bulls Say, Bears Say

Bulls

We think Keysight’s large research and development budget has created a competitively advantaged portfolio for communications testing that we don’t expect other firms would be able to easily replicate.

Bears

We think Keysight faces an uphill battle to disrupt an automotive testing market which we think is more fragmented and competitive.

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Trading Information

Previous Close Price
$143.84
Day Range
$143.64–145.25
52-Week Range
$118.57–172.72
Bid/Ask
$143.43 / $144.72
Market Cap
$25.15 Bil
Volume/Avg
794,977 / 1.2 Mil

Key Statistics

Price/Earnings (Normalized)
18.14
Price/Sales
4.93
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
2.78%

Company Profile

Keysight Technologies is a leader in the field of testing and measurement, helping electronics OEMs and suppliers alike bring products to market to fit industry standards and specifications. Keysight specializes in the communications market, but also supplies into the government, automotive, industrial, and semiconductor manufacturing markets. Keysight’s solutions include testing tools, analytical software, and services. The firm’s stated objective is to reduce time to market and improve efficiency at its more than 30,000 customers.
Sector
Technology
Industry
Scientific & Technical Instruments
Stock Style Box
Mid Core
Total Number of Employees
14,900
Website
https://www.keysight.com

Competitors

Valuation

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Metric
KEYS
EMR
FTV
Price/Earnings (Normalized)
 18.1421.9821.53
Price/Book Value
 5.123.102.54
Price/Sales
 4.933.944.38
Price/Cash Flow
 19.3820.2018.75
Price/Earnings
KEYS
EMR
FTV

Financial Strength

Metric
KEYS
EMR
FTV
Quick Ratio
 1.210.680.96
Current Ratio
 1.931.181.50
Interest Coverage
 15.548.068.53
Quick Ratio
KEYS
EMR
FTV

Profitability

Metric
KEYS
EMR
FTV
Return on Assets (Normalized)
 16.13%5.56%5.79%
Return on Equity (Normalized)
 30.05%12.76%9.33%
Return on Invested Capital (Normalized)
 20.67%6.72%7.92%
Return on Assets
KEYS
EMR
FTV
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