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Keysight Technologies Tops Q4 Results; Shares Fall

Despite the ongoing supply chain constraints, Keysight Technologies, Inc. (KEYS) delivered robust fourth-quarter results with both earnings and revenue beating estimates. Based on all-time high orders and strong growth across other key metrics, the company also provided upbeat first-quarter guidance  

However, after the news, shares fell more than 2% during the extended trading session on November 22. Keysight is a manufacturer of electronic test and measurement equipment and software.

Robust Results

Keysight’s quarterly earnings grew 12.3% year-over-year to $1.82 per share, significantly higher than analysts’ estimates of $1.64 per share.

Furthermore, Q4 revenue grew by 6% at $1.29 billion compared to the year-ago period, surpassing analysts’ estimates of $1.27 billion. Similarly, orders climbed 21% year-over-year to $1.49 billion.

For the full year fiscal 2021, the company’s earnings rose 28.5% annually to $6.23 per share, and revenue increased 17% to $4.94 billion annually with orders growing by 18%.  

Management Comments

Chairman, President, and CEO of Keysight, Ron Nersesian, said, “Demand for our first-to-market solutions is strong, resulting in double-digit, year-over-year order growth across all end markets and regions. Our momentum is being fueled by the success of our software-centric solutions strategy as we capitalize on long-term secular growth trends in our markets. We exit this year in a strong position, and expect to continue to deliver sustained, above-market, profitable growth.”

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Guidance

Based on the current economic scenario and business momentum, KEYS guided Q1 revenue to fall in the range of $1.225 billion to $1.245 billion, while the consensus estimate is pegged at $1.23 billion.

Q1 earnings are expected to be between $1.50 per share to $1.56 per share, higher than the consensus estimate of $1.51 per share.

Additionally, the company’s Board also approved a new share buyback program of $1.2 billion of its common stock effective immediately.

Target Price

With 6 unanimous Buys, the KEYS stock commands a Strong Buy consensus rating. The average Keysight Technologies price target of $199.4 implies 3.89% upside potential to current levels. Shares have gained 63.8% over the past year.

Smart Score

According to TipRanks’ Smart Score rating system, Keysight Technologies scores a 9 of 10, which indicates that the stock has strong potential to outperform market expectations.

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