One-glance verdict
Overvalued
$185.74 our estimate vs market $319.08
Wall Street consensus: $388.33 (109.1% higher than our fair-value estimate)
72% above our estimate, beyond the bull case
Fundamentals snapshot
Keysight Technologies, Inc.
KEYS · NYQ · Technology · Scientific & Technical Instruments
Current price
$319.08
52-week range
$152.85 - $374.96
Market cap
$54.53B
Balance sheet
Healthy
9.12x Adequate
Net debt $351.00M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 13.3% last year.
- Reward Returns 18.2% on equity, ahead of 60% of its peers.
- Risk Stock trades 59.4% above its 5-year average P/E.
- Risk Operating margin compressed from 24.6% to 18.8% over 3 years.
What this company does
Keysight Technologies, Inc.
Keysight Technologies sells the complex tools and software that engineers use to invent and test new electronics, from 5G network equipment to the computer chips in electric cars. The company makes its money primarily by providing these testing solutions to businesses in the communications and industrial sectors. This is important because as technology advances, the demand for precise and reliable testing equipment increases, making Keysight's products essential for innovation.
How the company got here
Keysight's origins trace back to the well-known company Hewlett-Packard (HP), founded in 1939. In 1999, HP spun off its measurement business into a new company called Agilent Technologies. Then, in 2014, Agilent spun off its electronic measurement division, creating Keysight Technologies as the independent company it is today. Since becoming its own company, Keysight has focused on expanding its software offerings and has acquired other companies to strengthen its capabilities in areas like network visibility and security testing.
What it actually does
Think of Keysight as a company that makes highly advanced testing and measuring equipment and software for engineers and scientists. Before a new smartphone, a 5G network, or an electric car can be released to the public, it needs to be rigorously tested to make sure it works correctly, safely, and efficiently. Keysight provides the tools that companies use for this entire process, from the initial design and computer simulations to manufacturing and final deployment. Essentially, if a product involves complex electronics, there's a good chance Keysight's technology was used to help develop and test it.
Communications Solutions Group
This is Keysight's largest business segment and it serves companies in the communications, aerospace, and defense industries. Its customers include companies that build the hardware and networks for things like 5G and future 6G wireless technology, as well as government and defense organizations that need to test sophisticated communication and surveillance systems. This group provides a wide range of solutions, from hardware instruments to specialized software, that help ensure these complex communication systems work reliably and securely. This segment is a major driver of the company's overall business.
Electronic Industrial Solutions Group
This part of the company provides testing and measurement solutions for a broad range of other industries outside of communications and defense. Key customers are in the automotive and energy sectors, especially with the rise of electric vehicles, as well as companies that make semiconductors (the small chips that power all electronics) and general consumer electronics. For example, an automaker would use this group's products to test the performance and safety of the batteries and electronic systems in an electric car. This segment helps companies in these fields design, simulate, and manufacture their electronic products more efficiently.
What management is betting on now
Keysight's strategy is focused on the most complex and rapidly advancing areas of technology where precise measurement is critical. This includes next-generation wireless like 6G, the high-speed networks inside data centers that power artificial intelligence (AI), electric and autonomous vehicles, and advanced semiconductor design. The company is also heavily investing in software to provide complete solutions that cover the entire product development cycle, from design to manufacturing. A key part of this strategy is to increase recurring revenue (predictable income from subscriptions and services), making the business more stable over time.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$222.00M
FY2024 Q4
$321.00M
FY2025 Q1
$346.00M
FY2025 Q2
$457.00M
FY2025 Q3
$291.00M
FY2025 Q4
$187.00M
FY2026 Q1
$407.00M
FY2026 Q2
$472.00M
Revenue
$1.72B
Net income
$349.00M
Diluted EPS
2.02
Operating cash flow
$501.00M
Free cash flow
$472.00M
Fetching…
Sources
Revenue
$1.60B
Net income
$281.00M
Diluted EPS
1.63
Operating cash flow
$441.00M
Free cash flow
$407.00M
Fetching…
Sources
Revenue
$1.42B
Net income
$233.00M
Diluted EPS
1.35
Operating cash flow
$225.00M
Free cash flow
$187.00M
Fetching…
Sources
Revenue
$1.35B
Net income
$191.00M
Diluted EPS
1.10
Operating cash flow
$322.00M
Free cash flow
$291.00M
Fetching…
Sources
Revenue
$1.31B
Net income
$257.00M
Diluted EPS
1.49
Operating cash flow
$484.00M
Free cash flow
$457.00M
Fetching…
Sources
Revenue
$1.30B
Net income
$169.00M
Diluted EPS
0.97
Operating cash flow
$378.00M
Free cash flow
$346.00M
Fetching…
Sources
Revenue
$1.29B
Net income
$-73.00M
Diluted EPS
-0.41
Operating cash flow
$359.00M
Free cash flow
$321.00M
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Sources
Revenue
$1.22B
Net income
$389.00M
Diluted EPS
2.22
Operating cash flow
$255.00M
Free cash flow
$222.00M
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Sources
Is it cheap or expensive?
Fair value $185.74 vs current price $319.08
Wall Street consensus is the average analyst price target: $388.33 (109.1% higher than our fair-value estimate).
Our most-likely fair value is $185.74 a share — about 41.8% below today's price of $319.08, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net debt $351.0M. Interest coverage 9.1x.
Net debt
$351.00M
Interest coverage
9.12x
Keysight Technologies, Inc.'s profit covers its interest bill about 9.1 times over.
Healthy
Worse cushion
Baseline
Better cushion
KEYS
BASELINE
Keysight Technologies, Inc.
Total debt $2.76B Interest coverage 9.12x This is the baseline the peer rows are being compared against.
Total debt $100.13M Interest coverage 100.59x +1,002% vs KEYS Carries about 11.0x more debt cushion than KEYS.
Total debt $2.46B Interest coverage 23.51x +158% vs KEYS Carries about 2.6x more debt cushion than KEYS.
Total debt $2.03B Interest coverage 19.29x +111% vs KEYS Carries about 2.1x more debt cushion than KEYS.
Total debt $3.60B Interest coverage 5.98x -35% vs KEYS Carries about 1.5x less debt cushion than KEYS.
What you should know
The case for and against KEYS
3 Rewards
2 Risks
Rewards
-
Revenue grew 13.3% last year.
-
Returns 18.2% on equity, ahead of 60% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 59.4% above its 5-year average P/E.
-
Operating margin compressed from 24.6% to 18.8% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
51.30x
Forward P/E
26.77x
P/B
8.61x
P/S
8.96x
EV/EBITDA
38.38x
PEG ratio
1.06x
Profitability
How much profit each dollar creates
Gross margin
62.1%
Operating margin
18.8%
Net margin
17.3%
ROE
18.2%
ROA
6.0%
Health
Liquidity and balance-sheet strength
Debt / equity
0.44x
Current ratio
1.90x
Quick ratio
1.33x
Total debt
$2.76B
Total cash
$2.41B
Growth
How the business has been compounding
Revenue TTM
$6.09B
Revenue 5Y CAGR
2.1%
EPS TTM
6.22
EPS 5Y CAGR
-7.5%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.49B
Free CF TTM
$1.28B
FCF margin
21.0%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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