Keysight Delivers Resilient Results And Guidance (Rating Upgrade)

Summary

• Keysight delivered better-than-expected Q2 results and guidance, signaling business stabilization and encouraging order growth, especially in AI data centers and industrial segments.
• Tariff impacts are manageable and largely one-time, with the company's diversified supply chain and limited China exposure mitigating long-term risks.
• Strong cost management, robust free cash flow, and a healthy balance sheet support the business, but valuation remains stretched at over 23x earnings.
• While I see limited upside and expect shares to be range-bound, improved fundamentals warrant upgrading KEYS from 'Sell' to a cautious 'Hold.'

Michael Vi

Shares of Keysight Technologies (NYSE:KEYS) have been a modest performer over the past year, gaining just 2%. However, the stock jumped 5% after hours on Tuesday after the company reported better than expected results and guidance, suggesting the bottom may be in. I

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.