Keysight Technologies Shares Plummet 13% Following Q3 Results

Keysight Technologies, Inc. (NYSE: KEYS) is a prominent player in the electronic design and test solutions industry. The company, headquartered in Santa Rosa, California, provides innovative solutions to accelerate the development of electronic products. KEYS operates in a competitive landscape, with rivals like Tektronix and Rohde & Schwarz. The company is set to release its quarterly earnings on May 20, 2025.

Wall Street anticipates KEYS to report earnings per share (EPS) of $1.65 for the quarter ending April 2025. This represents a 17% increase from the previous year, highlighting the company's growth trajectory. Revenue is projected to reach $1.28 billion, a 5% rise compared to the same quarter last year. These figures underscore the company's ability to generate higher earnings through increased revenue.

Despite the positive outlook, analysts have slightly revised the consensus EPS estimate downward by 0.3% over the past month. This adjustment reflects a reassessment of initial projections, indicating some skepticism about KEYS' ability to exceed expectations. Such revisions are important as they often influence investor behavior and can impact the stock's short-term price performance.

Keysight's management is actively pursuing strategic collaborations to drive business expansion. A notable partnership in the reported quarter is with Coherent Corp., focusing on advanced illumination solutions for 3D sensing applications. This collaboration aims to enhance Coherent's new laser technology, supporting higher data rates and facilitating the deployment of Artificial Intelligence and other advanced applications.

Financially, KEYS has a price-to-earnings (P/E) ratio of approximately 46.17, indicating investor confidence in its earnings potential. The company's price-to-sales ratio is about 5.62, reflecting the market's valuation of its revenue. With a debt-to-equity ratio of 0.39, KEYS maintains a moderate level of debt, showcasing financial stability. The current ratio of 2.95 further indicates a strong ability to cover short-term liabilities.

Keysight Technologies (NYSE:KEYS), a prominent player in the electronic measurement industry, faced a challenging third quarter in fiscal 2024. The company, known for its contributions to wireless communications, aerospace and defense, and semiconductor markets, reported a decrease in revenue year over year. This downturn was primarily due to weakened demand across its diverse sectors, reflecting broader market challenges.

Despite the dip in revenue, Keysight Technologies managed to outperform earnings expectations for the quarter. This achievement suggests that the company has effectively controlled its costs or found ways to operate more efficiently amidst declining sales. Such resilience in earnings, despite lower revenues, is noteworthy and indicates a robust underlying business model.

In light of these developments, Mark Delaney of Goldman Sachs has set an optimistic price target of $181 for KEYS. This target, reported by StreetInsider, represents a significant potential upside of 18.16% from the stock's trading price of approximately $153.19 at the time of the announcement. Goldman Sachs' reiteration of a Buy rating on KEYS underscores confidence in the company's long-term growth prospects, despite the short-term revenue challenges.

The contrast between the company's revenue decline and the positive outlook from analysts like those at Goldman Sachs highlights the complex dynamics at play in the valuation of tech companies. While current performance may show volatility, the long-term perspective based on the company's market position, technological advancements, and strategic initiatives can paint a more optimistic picture. This duality is a common theme in the tech sector, where future potential often drives investment decisions as much as current performance.

Keysight Technologies (NYSE:KEYS), a prominent player in the electronic measurement industry, faced a challenging third quarter in fiscal 2024. The company, known for its contributions to wireless communications, aerospace and defense, and semiconductor markets, reported a decrease in revenue year over year. This downturn was primarily due to weakened demand across its diverse sectors, reflecting broader market challenges.

Despite the dip in revenue, Keysight Technologies managed to outperform earnings expectations for the quarter. This achievement suggests that the company has effectively controlled its costs or found ways to operate more efficiently amidst declining sales. Such resilience in earnings, despite lower revenues, is noteworthy and indicates a robust underlying business model.

In light of these developments, Mark Delaney of Goldman Sachs has set an optimistic price target of $181 for KEYS. This target, reported by StreetInsider, represents a significant potential upside of 18.16% from the stock's trading price of approximately $153.19 at the time of the announcement. Goldman Sachs' reiteration of a Buy rating on KEYS underscores confidence in the company's long-term growth prospects, despite the short-term revenue challenges.

The contrast between the company's revenue decline and the positive outlook from analysts like those at Goldman Sachs highlights the complex dynamics at play in the valuation of tech companies. While current performance may show volatility, the long-term perspective based on the company's market position, technological advancements, and strategic initiatives can paint a more optimistic picture. This duality is a common theme in the tech sector, where future potential often drives investment decisions as much as current performance.

Shares of Keysight Technologies (NYSE:KEYS) experienced a more than 13% decline intra-day today due to the company's provided guidance that came in worse than expected.

The earnings per share (EPS) for the third quarter were $2.19, surpassing the Street estimate of $2.04. The company's revenue for the quarter remained unchanged year-over-year, amounting to $1.38 billion, aligning with the Street predictions.

Looking ahead to the fourth quarter of 2023, Keysight Technologies anticipates revenue to fall within the range of $1.29 billion to $1.31 billion, falling short of the Street figure of $1.39 billion. The projected non-GAAP EPS for the same period is expected to be between $1.83 and $1.89, which is lower than the analysts' expectation of $1.99.

For the entire fiscal year, the company anticipates its revenue to reach $5.45 billion and its EPS to be $8.19. This compares to the Street estimates of $5.55 billion in revenue and an EPS of $8.18.

Keysight Technologies (NYSE:KEYS) shares surged more than 7% yesterday after the company reported its Q2 earnings, with EPS of $2.12 coming in better than the Street estimate of $1.95. Revenue was $1.39 billion, beating the Street estimate of $1.38B.

For Q3, the company expects revenue in the range of $1.34-$1.39B, compared to the Street estimate of $1.38B, and EPS in the range of $2.00-$2.06, compared to the Street estimate of $1.96.

According to the analysts at Deutsche Bank, investor sentiment has been leaning incrementally negative in recent months, despite a more positive Analyst Day in March where management laid out better than expected multi-year targets.

Keysight Technologies (NYSE:KEYS) shares surged more than 7% yesterday after the company reported its Q2 earnings, with EPS of $2.12 coming in better than the Street estimate of $1.95. Revenue was $1.39 billion, beating the Street estimate of $1.38B.

For Q3, the company expects revenue in the range of $1.34-$1.39B, compared to the Street estimate of $1.38B, and EPS in the range of $2.00-$2.06, compared to the Street estimate of $1.96.

According to the analysts at Deutsche Bank, investor sentiment has been leaning incrementally negative in recent months, despite a more positive Analyst Day in March where management laid out better than expected multi-year targets.