Keysight Technologies (NYSE:KEYS): An Affordable Growth Pick With Accelerating Fundamentals

Keysight Technologies (NYSE:KEYS), quoted at 327.21, up 1.42%, fits an affordable-growth strategy targeting companies with accelerating fundamentals, reasonable growth-adjusted valuations and financial strength. Keysight provides electronic design and test solutions for communications, networking and industrial electronics. The company has an overall fundamental rating of 7 out of 10, including growth of 8 out of 10. EPS increased 45.43% and revenue 25.54% over the past year. Forecasts call for average annual EPS growth of 20.81% and revenue growth of 12.85%; both exceed recent historical averages. Analysts also expect earnings growth of roughly 30.47% over the coming years. Valuation is mixed, earning 5 out of 10. The trailing P/E of 32.66 exceeds the S&P 500 average of 25.57, but is cheaper than 62.30% of Electronic Equipment, Instruments and Components peers. The forward P/E of 23.08 is modestly above the S&P 500 forward multiple of 20.82. A low PEG ratio makes the valuation more reasonable if projected growth materializes. Quality provides important guardrails. Keysight’s profitability rating is 8 out of 10 and health rating 7 out of 10. Its 19.14% profit margin, 20.25% operating margin and 19.18% ROE outperform 98.36%, 94.26% and 90.98% of peers, respectively. An Altman-Z score of 8.41 indicates limited near-term bankruptcy risk; debt to free cash flow is 1.71, and the current ratio is 2.02. Risks include no dividend, ROIC below its cost of capital and a debt-to-equity ratio that is not industry-leading, although absolute debt is limited. Keysight also appears on the fastest-growing stocks and high EPS growth screens. Investors can review ChartMill’s detailed fundamental analysis and latest affordable-growth results. This article is informational, not financial advice.