Keysight Technologies
KEYS
$338.64
+3.99%
Keysight Technologies, Inc. is a leading provider of electronic design and test solutions, serving the communications, aerospace, defense, automotive, and semiconductor industries with a comprehensive portfolio of testing tools, analytical software, and services. As a market leader in the test and measurement space, Keysight is recognized for its innovation and deep customer relationships, catering to over 30,000 customers globally. The current investor narrative centers on the company's robust growth trajectory, driven by strong demand in AI, 5G, and electronic industrial markets, as evidenced by record quarterly earnings and raised guidance. However, recent concerns about supply chain constraints and their potential impact on future growth and margins have introduced a note of caution, creating a dynamic debate around the stock's near-term prospects.…
KEYS
Keysight Technologies
$338.64
Related headlines
Investment Opinion: Should I buy KEYS Today?
Rating: Buy. Keysight's accelerating revenue growth (31.5% YoY), expanding margins (gross margin 68.6%), and reasonable forward valuation (PEG 0.96) support a bullish stance. The average analyst target of $415.08 implies 26.9% upside, and the consensus is bullish with recent upgrades from major firms. Key metrics include a forward PE of 23.97x, which is justified by expected EPS growth to $11.18, and a strong balance sheet with a current ratio of 2.35. The stock is trading at a premium to its historical average, but the growth trajectory and market position in AI and 5G testing warrant this premium. Risks include supply chain disruptions and potential multiple compression if growth decelerates. This Buy would be downgraded to Hold if revenue growth falls below 20% or if forward PE exceeds 30x. Overall, the stock is fairly valued relative to its growth prospects, making it an attractive investment for growth-oriented investors.
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KEYS 12-Month Price Forecast
The AI model assesses Keysight as bullish with medium confidence. The company's accelerating revenue growth and strong margins are compelling, but supply chain risks and a high trailing PE warrant caution. The stock is well-positioned to benefit from secular AI and 5G trends, and the forward valuation is attractive. However, the medium confidence reflects uncertainty around supply chain resolution and potential market volatility. If the company continues to execute and supply chain issues are resolved, the stock could outperform; conversely, any negative surprises could lead to a downgrade.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Keysight Technologies's 12-month outlook, with a consensus price target around $415.08 and implied upside of +22.6% versus the current price.
Average Target
$415.08
0 analysts
Implied Upside
+22.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$350 - $452
Analyst target range
Keysight is covered by 12 analysts, with a consensus recommendation leaning bullish, as evidenced by recent actions from major firms like Morgan Stanley (upgraded to Overweight), Citigroup (Buy), and JP Morgan (Overweight). The average analyst target price is $415.08, implying a substantial upside of approximately 26.9% from the current price of $327.21. The target range spans from a low of $350.00 to a high of $452.00, with the low target still representing a 7.0% upside, indicating that even the most bearish analyst sees value in the stock. The high target of $452.00 suggests that some analysts anticipate continued strong growth and potential multiple expansion, driven by sustained demand in AI and 5G markets. The relatively wide spread between the low and high targets (approximately 29%) reflects moderate uncertainty about the pace of future growth and the impact of supply chain challenges, but the overall bullish sentiment and the fact that all targets are above the current price signal strong conviction in Keysight's growth story.
Bulls vs Bears: KEYS Investment Factors
Keysight presents a compelling growth story with accelerating revenue, expanding margins, and strong analyst support. The bull case is underpinned by robust AI and 5G demand, which drove Q2 revenue up 31.5% YoY and gross margins to 68.6%. However, the bear case centers on supply chain risks that could temper growth and margins, along with a rich trailing valuation (PE 37.3x) that leaves little room for error. Currently, the bull case has stronger evidence given the fundamental momentum and reasonable forward valuation (PEG 0.96). The key tension is whether supply chain constraints will materially hamper the company's ability to meet the high growth expectations embedded in the stock price. If constraints ease, the stock could re-rate higher; if they persist, the stock may face downward pressure.
Bullish
- Revenue Growth Accelerating Sharply: Q2 FY2026 revenue surged 31.5% YoY to $1.717B, up from 23.3% in Q1 and 10.3% in Q4 FY2025. This acceleration is driven by robust demand in AI and 5G testing, indicating strong secular tailwinds.
- Strong Profitability and Margin Expansion: Gross margin expanded to 68.6% in Q2 FY2026, up from 62.4% in Q2 FY2025. Operating margin also improved to 23.7% from 15.8%, reflecting operational leverage and pricing power.
- Analyst Targets Imply Significant Upside: The average analyst target is $415.08, representing ~26.9% upside from the current price of $327.21. Even the lowest target of $350 implies 7% upside, and the high target of $452 suggests 38% potential.
- Reasonable Valuation on Forward Earnings: Forward PE of 23.97x is attractive relative to the PEG ratio of 0.96, indicating the stock is fairly valued given expected earnings growth. This is supported by strong EPS estimates of $11.18 for the next fiscal year.
Bearish
- Supply Chain Constraints Could Hurt Growth: Management warned about supply chain constraints that could impact future growth and margins. This uncertainty led to a stock drop despite beating earnings, highlighting a near-term risk to the bullish thesis.
- High Valuation on Trailing Earnings: Trailing PE of 37.34x is elevated, reflecting high expectations. If growth decelerates, the stock could face multiple compression, as seen in the recent 20.5% max drawdown from the 52-week high.
- Recent Price Momentum Has Faded: The stock is down 2.6% over the past month and 0.8% over three months, underperforming the S&P 500. This suggests waning momentum and potential consolidation after a strong run.
- Customer Concentration in Communications: The Communications Solutions Group accounts for 71.7% of revenue ($1.231B of $1.717B). This concentration exposes Keysight to cyclicality in telecom and AI infrastructure spending.
KEYS Technical Analysis
Keysight's stock has demonstrated a powerful long-term uptrend, with a 1-year price change of +95.99%, significantly outperforming the S&P 500's +18.65% over the same period. The current price of $327.21 sits at 87.3% of its 52-week range (low of $158.79, high of $374.96), indicating that the stock is trading near its highs, reflecting strong momentum but also potential overextension. This positioning suggests that while the trend is firmly bullish, investors should be mindful of the possibility of a pullback given the extended nature of the rally.
Beta
1.21
1.21x market volatility
Max Drawdown
-20.5%
Largest decline past year
52-Week Range
$159-$375
Price range past year
Annual Return
+96.5%
Cumulative gain past year
| Period | KEYS Return | S&P 500 |
|---|---|---|
| 1m | -4.5% | -1.1% |
| 3m | -3.4% | +3.0% |
| 6m | +21.0% | +15.4% |
| 1y | +96.5% | +16.2% |
| ytd | +63.9% | +12.1% |
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KEYS Fundamental Analysis
Keysight's revenue trajectory is robustly accelerating, with the most recent quarter (Q2 FY2026, ended April 30, 2026) reporting revenue of $1.717 billion, a 31.5% year-over-year increase. This growth is a significant acceleration from the prior quarter's 23.3% YoY growth (Q1 FY2026 revenue of $1.6 billion) and marks a clear inflection from the more moderate growth rates seen in FY2025 (e.g., Q4 FY2025 revenue of $1.419 billion, up 10.3% YoY). The Communications Solutions Group, contributing $1.231 billion in revenue, is the primary growth driver, benefiting from strong demand in AI and 5G-related testing, while the Electronic Industrial Solutions Group added $486 million, also showing solid growth. This accelerating revenue trend underscores the strength of Keysight's end-market demand and its ability to capitalize on secular technology trends.
Quarterly Revenue
$1.7B
2026-04
Revenue YoY Growth
+31.5%
YoY Comparison
Gross Margin
68.6%
Latest Quarter
Free Cash Flow
$1.4B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is KEYS Overvalued?
Given that Keysight is profitable, the PE ratio is the primary valuation metric. The trailing PE stands at 37.34x, while the forward PE is 23.97x, indicating that the market expects significant earnings growth in the coming year. The gap between trailing and forward PE suggests that the market is pricing in a substantial increase in earnings, which aligns with the company's recent growth acceleration and raised guidance. This forward-looking optimism is also reflected in the PEG ratio of 0.96, which suggests that the stock is reasonably valued relative to its expected growth rate.
PE
37.3x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 16x~51x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
23.0x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks include a moderate debt load (debt-to-equity 0.51) and reliance on continued growth to justify the forward PE of 23.97x. While free cash flow is strong at $1.447B TTM, any margin compression from supply chain issues could impact profitability. The company's operating margin improved to 23.7% in Q2, but this could be cyclical if demand softens. Revenue concentration in the communications segment (71.7% of total) adds risk if AI or 5G spending slows. Additionally, the company does not pay a dividend, so investors rely solely on capital appreciation, which increases sensitivity to earnings performance.
FAQ
The key risks include: 1) Supply chain constraints that could limit growth and margins, as warned by management. 2) High customer concentration in the communications segment (71.7% of revenue), making it vulnerable to a slowdown in AI or 5G spending. 3) Valuation risk, as the trailing PE of 37.34x leaves little room for error. 4) Market risk, with a beta of 1.21 indicating higher volatility than the market. The most severe risk is a prolonged supply chain disruption, which could lead to a significant de-rating.
The 12-month forecast is positive, with a base case target of $350-$415 (average $415.08) and a bull case target of $415-$452. The bear case target is $300-$350. The most likely scenario is the base case, with a 50% probability, assuming revenue growth moderates to around 25% and margins remain stable. The bull case (35% probability) would require supply chain issues to resolve and growth to stay above 30%. The bear case (15% probability) would occur if supply chain problems worsen and growth decelerates sharply.
KEYS is fairly valued relative to its growth prospects. The trailing PE of 37.34x is high, but the forward PE of 23.97x is more reasonable, reflecting expected earnings growth. The PEG ratio of 0.96 suggests the stock is undervalued relative to its growth rate. Compared to the market, KEYS trades at a premium, but this is justified by its strong revenue acceleration and margin expansion. The market is pricing in continued high growth, and if that materializes, the stock offers upside.
Yes, KEYS appears to be a good buy for growth investors. The stock has strong momentum with 31.5% YoY revenue growth and a forward PE of 23.97x, which is reasonable given expected EPS growth. Analyst targets imply a 26.9% upside to the average of $415.08. However, investors should be aware of supply chain risks that could impact near-term growth. The stock is suitable for those with a higher risk tolerance and a long-term perspective, as it may experience volatility due to its beta of 1.21.
KEYS is more suitable for long-term investment given its growth trajectory and the secular trends in AI and 5G. The stock has a beta of 1.21, indicating higher short-term volatility, which could be challenging for short-term traders. The company does not pay a dividend, so returns are driven by capital appreciation. A minimum holding period of 3-5 years is recommended to ride out market cycles and benefit from the company's growth. Short-term traders may find opportunities, but they should be prepared for significant price swings.