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what it is
Keysight sells the gear and software engineers use to design, simulate, and test complex electronics before they fail in the real world.
how it gets paid
Last year Keysight Tech made $5.4B in revenue. Test instruments was the main engine at $2.8B, or 35% of sales.
what just happened
Last earnings came in at $1.91 per share versus a $1.81 estimate, a 5.52% beat.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
80/100 earnings predictability — you can trust these numbers
29.9x trailing p/e — priced about right
24.5% return on capital — every dollar works hard here
xvary composite: 77/100 — average
What they do
Keysight sells the gear and software engineers use to design, simulate, and test complex electronics before they fail in the real world.
Keysight sits where mistakes get expensive. If your chip, network, or defense system fails after launch, you eat the cost, so customers keep paying for tools they already trust. That habit shows up in a 37.0% operating margin and 24.5% return on capital, which is plain English for strong pricing power and efficient reinvestment.
How they make money
$5.4B
annual revenue
Test instruments
$2.8B
flat
Test systems
$2.0B
flat
Software
$1.6B
up
Services and support
$1.6B
flat
The products that matter
industrial and electronics test
Electronic Industrial
$2.9B · 54% of revenue
it's the biggest segment at $2.9B and it still grew 3% while the rest of the story got messier. if you are looking for stability inside KEYS, this is where you start.
largest segment
telecom and chip test
Communications Solutions
$2.0B · 37% of revenue
this $2.0B segment fell 12%, which is why the stock is really a recovery debate right now. when semiconductor and network spending softens, this is the bruise that shows up first.
cyclical swing factor
recurring support layer
Services & Software
$0.5B · 9% of revenue
at $0.5B, this is the smallest segment, but it grew 8% while Communications shrank. the page does not give enough detail to call it the whole margin story, but it is clearly the steadier one.
small but steadier
Key numbers
37.0%
operating margin
Operating margin → the share of sales left after running the business → so what: Keysight keeps more from each dollar than most hardware names.
24.5%
return on capital
Return on capital → profit from each dollar invested → so what: management turns investment into earnings efficiently.
29.9x
trailing p/e
Trailing P/E → price versus last 12 months of earnings → so what: you are paying up for consistency, not a bargain-bin multiple.
$2.697B
backlog
Backlog → booked work not yet recognized as revenue → so what: it gives near-term visibility if customers keep projects on schedule.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 60 / 100
- long-term debt $2.5B (6% of capital)
- net profit margin 24.6% — keeps 25 cents of every dollar in revenue
- return on equity 31% — $0.31 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in KEYS 3 years ago → it's now worth $11,900.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
Last earnings came in at $1.91 per share versus a $1.81 estimate, a 5.52% beat.
The cleanest hard numbers around the quarter show $1.6B in revenue and $1.63 in EPS from SEC-verified filings. Consensus shows the latest print at $1.91, so you should watch the next report for a clean apples-to-apples trend line.
$1.6B
revenue
$1.63
eps
5.52%
surprise
the number that mattered
The 5.52% earnings beat mattered because a stock at 29.9x trailing earnings needs proof that estimates are still too low, not too high.
source: company earnings report, 2026
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What could go wrong
the top risk here is communications and semiconductor spending staying weak — because that already hit a $2.0B segment that makes up 37% of revenue.
med
communications cycle stays in the ditch
Communications Solutions produced $2.0B of revenue, or 37% of the total, and fell 12%. If chip and telecom customers keep delaying spending, the company-wide rebound gets pushed out with it.
This is the most direct operating risk because more than one-third of revenue sits in the weak segment already showing the damage.
med
valuation has recovery priced in
The stock trades at 29.9x earnings versus peer reference points of 27.2x for Flex and 28.3x for Qualcomm. You are not buying a busted multiple here. You are buying a premium one.
If growth stays muted, that premium can disappear even if the business remains profitable.
med
legal overhang is real, but thinly quantified
The page references a settled patent case from Feb 2024 and notes future claims remain possible. What it does not give you is a revenue or cost exposure number, which means the risk is real but the sizing is fuzzy from this snapshot alone.
When the data is thin, the practical takeaway is simple: do not underwrite legal risk as zero just because the page cannot fully model it.
A weak communications cycle already affects 37% of revenue, and the 29.9x earnings multiple gives you less room for disappointment than the business slowdown suggests.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
Q2 2026 earnings report
May 19, 2026 is the next hard checkpoint. You want to see whether the Communications decline is getting less ugly than the current -12%.
segment mix
Communications versus Electronic Industrial
One segment is $2.0B and shrinking 12%. The other is $2.9B and growing 3%. If that gap narrows, the recovery case gets real fast.
stability
Services & Software growth
At 9% of revenue and +8% growth, this is still a small piece. You want it growing faster because it is the cleanest stabilizer on the page.
valuation
whether 29.9x keeps making sense
A premium multiple is fine when EPS is accelerating. It is less charming when revenue just fell 6% and the cyclical segment is still under pressure.
Analyst rankings
earnings predictability
80 / 100
management has historically produced numbers analysts can model. in human-speak, this usually is not a chaos stock.
risk rank
3
this sits around the middle of the pack on safety. safer than the market's troublemakers, not a bunker stock either.
price stability
60 / 100
the stock moves, but not like a biotech or a meme trade. you are dealing with business-cycle volatility, not lottery-ticket volatility.
source: institutional data
Institutional activity
institutions have been net buying for 2 consecutive quarters — 389 buyers vs. 375 sellers in 3q2025. total institutional holdings: 0.2B shares. net buying for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$160
$311
$214
current price
$236
target midpoint · +10% from current · 3-5yr high: $295 (+40% · 9% ann'l return)
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