10Y annualized return is
excellent
at 15.8% per year
KEYS has met or exceeded earnings expectations in
all
recent quarters (10/10)
Strong Gross Profit Margin
Strong Net Profit Margin
Healthy Return on Equity
Strong Liquidity Ratios
Low Debt Levels
🏆 Strong Market Position
🔄 Diversified Customer Base
💡 Innovation and R&D Focus
📈 Gradual Recovery Outlook
🚀 AI and 6G Opportunities
🌍 International Expansion
High P/E Ratio
Elevated Price-to-Sales Ratio
Moderate Operating Profit Margin
Interest Coverage Concerns
⚠️ Potential Order Weakness
Overall, Keysight demonstrates a strong business model with competitive advantages and a positive outlook for future growth driven by innovation and a diverse customer base. However, external uncertainties could pose challenges that need to be managed carefully.
Analysis Date: February 25, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Keysight Technologies, Inc. makes tools and software that help companies design and test electronic devices. They work with various industries, such as communications, automotive, and defense, providing products like testing equipment for smartphones and computers. Their services also include training and support to help customers use their products effectively. Founded in 1939 and based in California, Keysight is all about ensuring electronic devices work properly and efficiently.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$43.89
Current Market Price: $126.15
IV/P Ratio: 0.35x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-187.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for KEYS
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (36.17)
P/B ratio ≤ 1.5 (4.26)
Current ratio ≥ 2.0 (2.95x)
Long-term debt < Net current assets (0.67x)
Margin of safety (-187.0%)
KEYS does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
11.97%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
62.48%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
12.18%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
The net profit margin of 16.42% indicates that KEYS effectively converts revenue into actual profit, showcasing strong operational efficiency.
A return on equity (ROE) of 11.97% reflects effective management in utilizing shareholders' equity to generate profits, which is a positive indicator for investors.
With an operating profit margin of 17.90%, there is room for improvement in operational efficiency compared to industry peers.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.39x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q1 2025
Current Ratio
Current assets divided by current liabilities
2.95x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q1 2025
The current ratio of 2.95 and quick ratio of 2.26 indicate that KEYS has a strong liquidity position, ensuring it can cover short-term liabilities.
A debt-to-equity ratio of 0.39 suggests a conservative approach to leverage, indicating lower financial risk and greater financial stability.
Although the interest coverage ratio of 10.41 is acceptable, it is important to monitor for any significant changes in earnings that could affect this ratio.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
Keysight is recognized as a market leader in delivering innovative solutions across various technology sectors, including communication, aerospace, and defense. The company has established itself as a trusted partner for technologically advanced companies.
Keysight's broad customer engagement, particularly in AI data centers and aerospace, demonstrates its ability to adapt and serve various sectors, thereby mitigating risks associated with market fluctuations.
The company has a strong innovation pipeline, continuously launching new products tailored to meet the evolving demands of high-tech industries, especially in AI and advanced communications.
Management expects a gradual recovery in 2025, supported by positive signals in the sales funnel and customer engagements, indicating an optimistic market environment.
The ongoing development in AI technologies and the transition towards 6G present substantial growth opportunities for Keysight, with a strong emphasis on R&D investments.
Keysight is strategically positioning itself to support global customers, especially in China, by adapting to geopolitical changes and focusing on customers with a 'go global' strategy.
Ongoing uncertainties in the aerospace and defense sectors due to continuing resolutions may impact order volumes in the near term, requiring close monitoring.