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Keysight Technologies (KEYS)
NYSE:KEYS
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Keysight Technologies
(NYSE:KEYS)
Rating:78Outperform
Price Target:
$185.00
▲(14.23%Upside)
Positive Factors
Acquisition
The anticipated Spirent acquisition is expected to enhance Keysight’s leverage to market recovery, with operational synergies driving margin improvements.
Earnings
Management raised its FY25 revenue growth forecast to ~6% and adjusted EPS growth to >10%, suggesting confidence in future performance.
Order Growth
Keysight saw core orders grow +8% y/y in 2QF25 despite tariff headwinds, indicating resilience in demand.
Negative Factors
Earnings Guidance
The 3QF25 adjusted EPS guidance was below prior consensus, reflecting challenges due to tariff expenses.
Tariffs
Tariffs have created an unexpected cost headwind for Keysight, with an annualized impact estimated at $75-$100 million.
Keysight Technologies (KEYS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$27.87B
Dividend YieldN/A
Average Volume (3M)960.66K
Price to Earnings (P/E)38.0
Beta (1Y)1.63
Revenue Growth-1.16%
EPS Growth-7.04%
CountryUS
Employees15,400
SectorTechnology
Sector Strength83
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)1.70
Shares Outstanding172,108,860
10 Day Avg. Volume902,378
30 Day Avg. Volume960,660
Financial Highlights & Ratios
PEG Ratio-153.61
Price to Book (P/B)5.14
Price to Sales (P/S)0.00
P/FCF Ratio27.66
Enterprise Value/Market Cap0.95
Enterprise Value/Revenue1.32
Enterprise Value/Gross Profit8.48
Enterprise Value/Ebitda5.56
Forecast
1Y Price Target
$184.25Price Target Upside13.77% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Keysight Technologies Business Overview & Revenue Model
Company DescriptionKeysight Technologies, Inc. provides electronic design and test solutions to commercial communications, networking, aerospace, defense and government, automotive, energy, semiconductor, electronic, and education industries in the Americas, Europe, and the Asia Pacific. Its Communications Solutions Group segment provides electronic design automation (EDA) software; radio frequency and microwave test solutions, and related software; hardware and virtual network test platforms and software applications, including data center, routing and switching, software defined networking, security, and encryption; oscilloscopes, logic and serial protocol analyzers, logic-signal sources, arbitrary waveform generators, and bit error rate testers; and optical modulation analyzers, optical component analyzers, optical power meters, and optical laser source solutions, as well as resells refurbished used Keysight equipment. The company's Electronic Industrial Solutions Group segment offers design tools; design verification tools; and digital multimeters, function generators, frequency counters, data acquisition systems, audio analyzers, LCR meters, thermal imagers, source measure units, ultra-high precision device current analyzers, and test executive software platforms, as well as various power supplies comprising AC/DC modular supplies and electronically programmable loads. This segment also provides printed-circuit-board-assembly testers, integrated circuit parametric testers, and sub-nano-meter positioning sub-assemblies; and test and measurement products and software. The company offers product support, technical support, and training and consulting services. It sells its products through direct sales force, distributors, resellers, and manufacturer's representatives. Keysight Technologies, Inc. was founded in 1939 and is headquartered in Santa Rosa, California.
How the Company Makes MoneyKeysight Technologies generates revenue through the sale of its electronic measurement instruments and related software and services. The company's primary revenue streams include the sale of hardware products like oscilloscopes, signal analyzers, and network analyzers, which are essential for testing and validating electronic components and systems. Additionally, Keysight offers software solutions that enhance the functionality and performance of its hardware products, allowing customers to achieve greater precision and efficiency in their testing processes. Service revenue also plays a significant role, as Keysight provides calibration, repair, and consulting services to ensure optimal performance and compliance with industry standards. The company also benefits from strategic partnerships and collaborations with other industry players, which help expand its market reach and drive technological advancements.
Keysight Technologies Key Performance Indicators (KPIs)
Any
Revenue by End Markets
Breaks down revenue by customer industries, providing insight into market demand and diversification across sectors.
Breaks down revenue by customer industries, providing insight into market demand and diversification across sectors.
Data provided by:
Main Street Data
Main Street DataKeysight Technologies Earnings Call Summary
Earnings Call Date:May 20, 2025
(Q2-2025)
| % Change Since: -0.52%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong quarter with revenue and EPS exceeding guidance, robust order growth, and notable performance in Communications Solutions and Aerospace Defense. However, challenges such as tariff impacts on margins and mixed demand in certain segments were highlighted. Overall, the positive aspects, including strong financial performance and strategic growth initiatives, outweigh the concerns over tariffs and mixed demand.Q2-2025 Updates
Positive Updates
Exceeding Revenue and EPS Guidance
Keysight delivered revenue of $1.3 billion and earnings per share of $1.70, both exceeding the high end of guidance for Q2 2025.
Strong Order Growth
Orders grew 8% year-over-year and 4% sequentially to $1.3 billion, indicating strong demand in various segments.
Communications Solutions Group Performance
CSG revenue reached $913 million, up 9%, driven by sustained strength in wireline and growth in wireless, along with double-digit growth in commercial communications orders.
Aerospace Defense and Government Growth
Orders and revenue in the aerospace, defense, and government sectors grew by 9%, supported by strength in the US and Europe and ongoing investments in technology.
Software and Services Growth
Software and services accounted for approximately 36% of Keysight's revenue, with design engineering software orders growing double digits.
Capital Allocation and Share Repurchase
Keysight repurchased 1,042,000 shares this quarter at an average price of approximately $144, totaling $150 million.
Negative Updates
Tariff Impact on Margins
Approximately $7 million of new tariff expenses impacted gross and operating margins by 60 basis points, reducing EPS by $0.04.
Mixed Demand in Electronics Industrial Solutions Group
While revenue returned to growth, automotive orders and revenues were down, and general electronics orders grew at a lower rate.
Tariff Exposure and Mitigation Challenges
Annual tariff exposure is estimated at $75 million to $100 million, with mitigation expected to be fully realized only by the end of the fiscal year.
Company Guidance
During the fiscal second quarter of 2025, Keysight Technologies reported revenue of $1.3 billion and earnings per share of $1.70, both exceeding the high end of their guidance. The company experienced an 8% year-over-year growth in orders, reaching $1.3 billion, and demonstrated resilience despite macroeconomic uncertainties. Keysight's Communications Solutions Group (CSG) saw a 9% increase in revenue, driven by strong demand in commercial communications and aerospace defense. The Electronics Industrial Solutions Group (EISG) returned to growth after six quarters of decline, with a 5% increase in revenue, supported by strong demand in semiconductor testing. Software and services constituted 36% of total revenue, while annual recurring revenue accounted for 28% of the total mix. Despite facing $7 million in new tariff expenses that impacted margins by 60 basis points, the company remains confident in its flexible cost structure and global supply chain capabilities. Keysight raised its full-year growth expectations and anticipates FY '25 revenue growth at the midpoint of its 5% to 7% long-term target, with annual EPS growth slightly above the 10% target.Keysight Technologies Financial Statement Overview
Summary
Overall, Keysight Technologies showcases a strong financial position with solid profitability, efficient cash flow generation, and balanced leverage. While revenue growth has slowed recently, the company maintains strong margins and robust cash flow ratios, indicating solid operational efficiency and financial health.Income Statement
Keysight Technologies demonstrates strong profitability with a consistent gross profit margin of over 60% and a net profit margin of consistently above 10%. The TTM (Trailing-Twelve-Months) EBIT and EBITDA margins stand robust at 17.9% and 22.5%, respectively. However, the revenue growth rate shows a slight decline in the recent year, with a noticeable decrease from 2023 to 2024.85
Very Positive
Balance Sheet
The company maintains a healthy balance sheet with a stable Debt-to-Equity ratio around 0.4, indicating moderate leverage. The Return on Equity (ROE) is solidly positioned, with a TTM ROE of approximately 11.8%. The Equity Ratio stands strong at 55.2%, showcasing financial stability. There are no significant risks regarding high leverage or low equity.78
Positive
Cash Flow
Keysight Technologies exhibits robust cash flow management with a TTM Free Cash Flow of $995 million and a Free Cash Flow to Net Income ratio well above 1, indicating efficient conversion of net income to cash. The Free Cash Flow Growth Rate from 2024 to TTM is notable, reflecting strong cash generation capabilities.80
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 5.02B | 4.98B | 5.46B | 5.42B | 4.94B | 4.22B | Gross Profit |
| 3.13B | 3.13B | 3.53B | 3.45B | 3.07B | 2.53B | EBIT |
| 884.00M | 833.00M | 1.36B | 1.33B | 1.08B | 765.00M | EBITDA |
| 1.12B | 1.21B | 1.65B | 1.58B | 1.38B | 1.16B | Net Income Common Stockholders |
| 611.00M | 614.00M | 1.06B | 1.12B | 894.00M | 627.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.06B | 1.80B | 2.47B | 2.04B | 2.05B | 1.76B | Total Assets |
| 9.39B | 9.27B | 8.68B | 8.10B | 7.78B | 7.22B | Total Debt |
| 2.02B | 2.03B | 2.03B | 2.02B | 2.02B | 1.98B | Net Debt |
| -40.00M | 234.00M | -446.00M | -24.00M | -29.00M | 225.00M | Total Liabilities |
| 4.20B | 4.16B | 4.03B | 3.94B | 4.00B | 3.92B | Stockholders Equity |
| 5.19B | 5.11B | 4.65B | 4.16B | 3.78B | 3.30B |
| Cash Flow | Free Cash Flow | ||||
| 963.00M | 898.00M | 1.21B | 959.00M | 1.15B | 899.00M | Operating Cash Flow |
| 1.10B | 1.05B | 1.41B | 1.14B | 1.32B | 1.02B | Investing Cash Flow |
| -341.00M | -819.00M | -288.00M | -251.00M | -353.00M | -442.00M | Financing Cash Flow |
| -439.00M | -913.00M | -687.00M | -861.00M | -671.00M | -413.00M |
Keysight Technologies Technical Analysis
Positive
161.95
Price Trends
149.42
Positive
157.79
Positive
158.16
Positive
Market Momentum
2.60
Positive
60.05
Neutral
75.71
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KEYS, the sentiment is Positive. The current price of 161.95 is above the 20-day moving average (MA) of 161.24, above the 50-day MA of 149.42, and above the 200-day MA of 158.16, indicating a bullish trend. The MACD of 2.60 indicates Positive momentum. The RSI at 60.05 is Neutral, neither overbought nor oversold. The STOCH value of 75.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KEYS.
Keysight Technologies Risk Analysis
Keysight Technologies disclosed 38 risk factors in its most recent earnings report. Keysight Technologies reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Keysight Technologies Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $27.87B | 38.04 | 14.30% | ― | -1.16% | -7.04% | |
77 Outperform | $23.46B | 28.62 | 8.61% | ― | 2.98% | -5.64% | |
77 Outperform | $24.82B | 32.06 | 7.70% | 0.44% | 0.85% | -10.01% | |
77 Outperform | $17.23B | 11.76 | 31.00% | ― | -6.93% | 537.94% | |
74 Outperform | $5.95B | 26.42 | 9.50% | 0.99% | -1.14% | ― | |
73 Outperform | $12.39B | ― | 1.25% | ― | 21.68% | 92.07% | |
62 Neutral | $11.81B | 10.34 | -7.44% | 2.91% | 7.41% | -7.93% |
* Technology Sector Average
Performance Comparison
KEYS
Keysight Technologies
161.95
25.21
18.44%
COHR
Coherent Corp
79.74
13.12
19.69%
MKSI
MKS Instruments
88.64
-41.27
-31.77%
TDY
Teledyne Technologies
500.67
111.59
28.68%
TRMB
Trimble
72.22
16.86
30.46%
FTV
Fortive
73.03
0.19
0.26%
Keysight Technologies Corporate Events
Executive/Board Changes
Keysight Technologies Announces Leadership Transition
Neutral
May 27, 2025
On May 26, 2025, Keysight Technologies announced that Soon Chai Gooi, Senior Vice President of Order Fulfillment and Digital Operations, will step down and retire by the end of October 2025. Ingrid Estrada will succeed him as Senior Vice President, Chief Supply Chain and Operations, transitioning from her current role as Chief People and Administrative Officer.
The most recent analyst rating on (KEYS) stock is a Sell with a $165.00 price target. To see the full list of analyst forecasts on Keysight Technologies stock, see the KEYS Stock Forecast page.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.