Goldman Sachs (NYSE:GS) has reaffirmed its Buy rating on Keysight Technologies (NYSE: NYSE:KEYS), with a steady price target of $181.00.
The firm's analyst highlighted Keysight's third-quarter fiscal year 2024 performance, which showed revenue of $1.22 billion and non-GAAP earnings per share (EPS) of $1.57, surpassing Wall Street's expectations by 2% and $0.22, respectively.
The reported non-GAAP EPS, adjusted for tax-rate benefits, would have been $1.41.
Keysight's orders for the quarter amounted to $1,249 million, a slight year-over-year increase of 0.4% and a 2% rise quarter-over-quarter, with a book-to-bill ratio (BTB) of 1.03.
For the fourth quarter of fiscal year 2024, Keysight anticipates revenue and EPS to be approximately $1.26 billion and $1.56 at the midpoint, which aligns with and is slightly higher than current market projections. The EPS guidance is estimated to include a $0.05 benefit from a lower tax rate.
In other recent news, Keysight surpassed Q3 expectations, reporting revenue of $1.2 billion and earnings per share (EPS) of $1.57. The company also experienced a slight increase in orders for the quarter, primarily driven by commercial communications growth. Following these results, Susquehanna maintained a Positive rating on Keysight Technologies but lowered the price target to $185 from $195. Similarly, BofA Securities adjusted its outlook on Keysight, raising its price target from $135 to $150 while maintaining an Underperform rating.
Keysight Technologies has announced plans to expand its serviceable available market and pursue mergers and acquisitions. The Spirent (LON:SPT) acquisition has received shareholder approval and is expected to close in the first half of fiscal year 2025. The company also repurchased 1.07 million shares for $150 million, ending the quarter with a strong cash position of $1.6 billion.
InvestingPro Insights
As Goldman Sachs maintains a positive outlook on Keysight Technologies, real-time metrics from InvestingPro reinforce the company's robust financial health and market performance. With a market capitalization of $24.04 billion, Keysight demonstrates a solid price-to-earnings (P/E) ratio of 30.24, indicating investors' confidence in its earnings potential. The company's gross profit margin stands strong at 64.16% for the last twelve months as of Q2 2024, showcasing efficient operations and cost management.
InvestingPro Tips highlight Keysight's significant return over the last week, suggesting a favorable short-term investor sentiment. Additionally, the company's liquid assets surpassing short-term obligations underscore its financial stability, which is crucial for sustaining operations and investing in growth opportunities. For investors seeking further insights, InvestingPro offers additional tips on Keysight Technologies, providing a comprehensive analysis of the company's financial health and market potential.
It is noteworthy that while analysts anticipate a sales decline in the current year, Keysight's profitability over the last twelve months and the prediction of continued profitability this year present a balanced view of the company's performance. Although Keysight does not pay dividends, its high return over the last decade may appeal to growth-focused investors. For a deeper dive into Keysight's financials and market prospects, readers can explore more InvestingPro Tips available on the platform.
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