Keysight Earnings: We Like the Growth Outlook for Fiscal 2025 and See Shares as Fairly Valued

We retain our $157 per share fair value estimate for wide-moat Keysight Technologies with our long-term thesis intact after good October-quarter results. Keysight’s revenue declined in fiscal 2024 behind weaker end-market demand, but we expect a return to mid-single-digit growth in fiscal 2025 and beyond. Management’s growth outlook for fiscal 2025 was a little light compared with our model, but we view a return to growth positively nonetheless. We expect demand to remain mixed across Keysight’s end markets in 2025, with strength in wired data center connectivity offset by softer demand for wireless telecom spending and electric vehicle investment. Keysight looks fairly valued to us. Shares rose nearly 10% in after-hours trading on guidance that beat FactSet consensus, but was more in line with our own model.