One-glance verdict
Overvalued
$168.55 our estimate vs market $313.36
Wall Street consensus: $415.08 (146.3% higher than our fair-value estimate)
86% above our estimate, beyond the bull case
Fundamentals snapshot
Keysight Technologies, Inc.
KEYS · NYQ · Technology · Scientific & Technical Instruments
Current price
$313.36
52-week range
$158.79 - $374.96
Market cap
$53.35B
Balance sheet
Healthy
9.12x Adequate
Net debt $161.00M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 22.5% last year.
- Reward Returns 20.9% on equity, ahead of 60% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Stock trades 31.6% above its 5-year average P/E.
What this company does
Keysight Technologies, Inc.
Keysight Technologies creates specialized tools and software that other companies use to test their electronic inventions, from 5G networks to electric car batteries. Their revenue (the total money a company brings in from sales) comes from selling this essential technology to innovators in demanding fields like wireless communication, aerospace, and semiconductors (the brains of modern electronics). This makes Keysight a critical behind-the-scenes supplier, as their equipment helps ensure the new technology we rely on works correctly and safely.
How the company got here
Keysight's story begins with Hewlett-Packard (HP), a pioneering technology company founded in 1939. For decades, HP was a leader in electronic test and measurement equipment. In 1999, HP spun off this business, along with others, into a new company called Agilent Technologies. Then, in 2014, Agilent decided to separate its electronic measurement business, creating the independent company we know today as Keysight Technologies. This move allowed Keysight to focus entirely on the electronic design and test industry.
What it actually does
Imagine all the electronics you use daily—your phone, your car, the internet itself. Keysight makes the complex tools and software that engineers use to design, test, and measure these products to make sure they work correctly and securely. Think of them as providing the high-tech rulers and scales for the electronic world, helping companies invent the future faster and with less risk. Their customers are other businesses, not everyday shoppers, and include major names in technology, communications, automotive, and aerospace.
Communications Solutions Group
This is Keysight's largest business segment, making up the majority of its revenue. It provides testing and measurement tools for the communications industry, from the development of 5G and future 6G wireless technologies to the equipment that powers massive data centers. Its customers include companies that build wireless devices, internet infrastructure, and networking gear. This group also serves the aerospace and defense industry, providing solutions to test satellites, radar, and other critical government communication systems.
Electronic Industrial Solutions Group
This segment provides testing solutions for a wide range of other technology-focused industries and represents a smaller but significant portion of the company's business. A major focus is the automotive industry, where they help engineers design and test the complex electronics in electric and self-driving cars. They also serve the semiconductor industry by providing tools to test computer chips, as well as companies making consumer electronics and other industrial equipment.
What management is betting on now
Keysight's leadership is focused on providing solutions for the most complex and rapidly growing areas of technology. This includes being a key player in the development of next-generation wireless like 6G, the infrastructure behind artificial intelligence (AI), and the electronics powering electric and autonomous vehicles. A core part of their strategy is to provide more software-based solutions, which can create more consistent and predictable revenue (money a company can reliably expect to receive). They aim to be the first to market with tools that help their customers innovate and solve their toughest engineering challenges.
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 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
FY2026 Q3
$403.00M
Revenue
$1.85B
Net income
$397.00M
Diluted EPS
2.30
Operating cash flow
$437.00M
Free cash flow
$403.00M
Fetching…
Sources
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
Fetching…
Sources
Is it cheap or expensive?
Fair value $168.55 vs current price $313.36
Wall Street consensus is the average analyst price target: $415.08 (146.3% higher than our fair-value estimate).
Our most-likely fair value is $168.55 a share — about 46.2% below today's price of $313.36, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net debt $161.0M. Interest coverage 9.1x.
Net debt
$161.00M
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 $2.77B 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 $2.31B 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
1 Risk
Rewards
-
Revenue grew 22.5% last year.
-
Returns 20.9% on equity, ahead of 60% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 31.6% above its 5-year average P/E.
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)
42.35x
Forward P/E
22.59x
P/B
8.12x
P/S
8.11x
EV/EBITDA
31.51x
PEG ratio
0.62x
Profitability
How much profit each dollar creates
Gross margin
63.3%
Operating margin
25.7%
Net margin
19.1%
ROE
20.9%
ROA
7.2%
Health
Liquidity and balance-sheet strength
Debt / equity
0.42x
Current ratio
2.02x
Quick ratio
1.43x
Total debt
$2.77B
Total cash
$2.60B
Growth
How the business has been compounding
Revenue TTM
$6.58B
Revenue 5Y CAGR
2.1%
EPS TTM
7.40
EPS 5Y CAGR
-7.5%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.60B
Free CF TTM
$1.28B
FCF margin
19.5%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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