Profit Slide and Revenue Growth Outlook Might Change The Case For Investing In Keysight Technologies (KEYS)

• In August 2025, Keysight Technologies reported third-quarter sales of US$1.35 billion, an increase from the prior year, while net income nearly halved to US$191 million, with full-year revenue growth guidance set at approximately 7%.
• Despite stronger top-line revenue, the significant decrease in earnings highlights new expense pressures and profitability challenges that may impact investor expectations.
• We'll explore how Keysight's sharp profit decline alongside raised revenue guidance could influence its future growth narrative and outlook.

Find companies with promising cash flow potential yet trading below their fair value.

Keysight Technologies Investment Narrative Recap

To be a Keysight Technologies shareholder, you need to believe in the company's ability to capitalize on AI-driven infrastructure investment, next-generation wireless adoption, and its expanding software and recurring services business. However, the recent sharp drop in net income despite higher revenue underscores the immediate risk from rising operational costs, which directly challenge earnings momentum, the most important short-term catalyst is whether continued AI and tech investment can offset these margin pressures. The latest earnings report makes this profitability challenge more visible, but it does not fundamentally alter the high-level growth story, as market demand for advanced test solutions still appears resilient.

Among recent company news, the August 2025 quarterly earnings announcement is the most relevant: revenue reached US$1.35 billion, up year over year, but net income fell by nearly 50 percent, highlighting a growing expense burden just as Keysight reaffirmed its guidance for 7 percent full-year revenue growth. This combination draws attention to the tension between securing top-line expansion, driven by AI, data center, and wireless end markets, and the risk that cost headwinds may dilute the benefit of these catalysts for shareholders.

In contrast, investors should be aware that higher revenue growth can be eclipsed by margin pressure if...

Read the full narrative on Keysight Technologies (it's free!)

Keysight Technologies' outlook anticipates $6.2 billion in revenue and $1.3 billion in earnings by 2028. This scenario assumes 6.7% annual revenue growth and a $558 million earnings increase from current earnings of $742 million.

Uncover how Keysight Technologies' forecasts yield a $188.18 fair value, a 13% upside to its current price.

Exploring Other Perspectives

Five Simply Wall St Community fair value estimates for Keysight range from US$157.31 to US$190.01, signaling a wide spread in expectations. With profitability risks now in sharper focus, it's clear that individual views on earnings resilience and valuation can differ dramatically, explore more opinions to inform your own.

Explore 5 other fair value estimates on Keysight Technologies - why the stock might be worth as much as 14% more than the current price!

Build Your Own Keysight Technologies Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Keysight Technologies research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free Keysight Technologies research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Keysight Technologies' overall financial health at a glance.

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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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