Keysight Earnings: Market Is Coming Around to Our Recovery Thesis and Shares Are Fairly Valued

We maintain our $157 fair value estimate for shares of wide-moat Keysight Technologies with our medium-term recovery thesis intact. Keysight’s fiscal third quarter results and fiscal fourth quarter guidance beat our model, and we see both indicating the green shoots of a demand recovery. Keysight has seen weak results in fiscal 2024 stemming from slower orders from communications and industrial customers. We see this downturn as short-term and market-driven. We continue to like the firm’s position for long-term growth as the best-of-breed provider of communications testing equipment, which also underpins our wide moat rating. Shares jumped 10% after hours on positive results and guidance, coming right up to our fair value estimate.