Assessing Keysight Technologies (KEYS) Valuation As Backlog Softens And Competition Pressures Growth

Recent commentary on Keysight Technologies (KEYS) points to softer backlog growth, flat revenue and declining earnings per share. Combined with lower returns on capital, this has put future growth assumptions under closer investor scrutiny.

See our latest analysis for Keysight Technologies.

Against that backdrop, Keysight’s share price has climbed 22.47% over the past 90 days and the 1 year total shareholder return is 24.74%. This suggests recent momentum despite questions around backlog strength and profitability.

If Keysight’s AI data center work has caught your interest, this could be a good moment to scan other infrastructure names. You can use our 33 AI infrastructure stocks as a starting point.

With revenue flat, earnings per share under pressure, returns on capital lower, and the share price up sharply and trading slightly above the latest analyst target, investors may reasonably ask whether there is still a buying opportunity here or if the market is already pricing in future growth.

Most Popular Narrative: 1% Overvalued

Keysight’s most followed valuation narrative puts fair value at about $220, just under the last close at $221.52. This raises questions about what is already priced in.

Expansion of software and recurring service offerings, now comprising 36% and 28% of total revenue respectively, increases gross and net margins by enhancing revenue stability, improving product mix, and reducing cyclicality from traditional hardware segments.

Read the complete narrative.

Curious what has to happen for that fair value to hold up? The narrative refers to faster revenue growth, higher margins, and a richer future earnings multiple. Want to see exactly how bold those assumptions are?

Result: Fair Value of $220 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the tariff hit of US$150 million to US$175 million, along with any slowdown in AI infrastructure orders, could quickly challenge those growth and margin assumptions.

Find out about the key risks to this Keysight Technologies narrative.

Build Your Own Keysight Technologies Narrative

If you look at the numbers and reach a different conclusion, or simply prefer to test your own assumptions, you can build a fresh Keysight view in just a few minutes with Do it your way.

A great starting point for your Keysight Technologies research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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