KEYS

Slow growerQuality: High (77/100)

Keysight Technologies · Information Technology · Electronic Equipment & Instruments

$377.70

52w 160.51 – 389.93

20y monthly, adjusted

Mkt cap

$64.3B

P/E

76.7

P/FCF

50.9

FCF yield

2.0%

ROE

14.5%

Shldr yield

0.6%

div 0.0% + bb 0.6%

What today's price assumes

At $64.3B, the market is pricing in 20.4% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last ten years, FCF actually grew 16.3% per year — the price asks for acceleration beyond the historical record.

Simple DCF per-share range: $115 · $257 · $351 (4% / base / optimistic growth). An estimate, not a target.

Adjust the assumptions yourself →

Historical multiple lens

At its own median P/OCF of 21.8× across 12 years, KEYS would trade near $180/share (25th–75th percentile: $138–$208); it trades at 45.6× today.

Assumes the historical multiple regime persists — re-ratings can be permanent.

Growth record

Compound annual growth rates from as-filed 10-K data, split-adjusted

Rev 3y

−0.3%

Rev 5y

+5.0%

Rev 10y

+6.5%

EPS 5y

+8.2%

EPS 10y

+5.0%

FCF 5y

+7.3%

FCF 10y

+16.3%

Fundamentals

Fiscal 2013–2025, from SEC filings

Revenue

2013: $2.9B

2014: $2.9B

2015: $2.9B

2016: $2.9B

2017: $3.2B

2018: $3.9B

2019: $4.3B

2020: $4.2B

2021: $4.9B

2022: $5.4B

2023: $5.5B

2024: $5.0B

2025: $5.4B

$0$2.0B$4.0B

Net income

2013: $457.0M

2014: $392.0M

2015: $513.0M

2016: $335.0M

2017: $102.0M

2018: $165.0M

2019: $621.0M

2020: $627.0M

2021: $894.0M

2022: $1.1B

2023: $1.1B

2024: $614.0M

2025: $850.0M

$0$500.0M$1.0B

Free cash flow

2013: $497.0M

2014: $493.0M

2015: $284.0M

2016: $329.0M

2017: $256.0M

2018: $423.0M

2019: $878.0M

2020: $899.0M

2021: $1.1B

2022: $959.0M

2023: $1.2B

2024: $898.0M

2025: $1.3B

$0$500.0M$1.0B

Diluted shares (lower is better)

2013: 167.0M

2014: 167.0M

2015: 171.0M

2016: 172.0M

2017: 182.0M

2018: 191.0M

2019: 191.0M

2020: 189.0M

2021: 187.0M

2022: 182.0M

2023: 179.0M

2024: 175.0M

2025: 173.0M

050.0M100.0M150.0M

Margins

Net marginFCF marginGross margin

Capital returned (dividends + buybacks)

2014: $0

2015: $0

2016: $62.0M

2017: $0

2018: $120.0M

2019: $159.0M

2020: $411.0M

2021: $673.0M

2022: $849.0M

2023: $702.0M

2024: $439.0M

2025: $375.0M

$0$250.0M$500.0M$750.0M

Cash vs long-term debt

CashLT debt

Quarterly

Discrete quarters from 10-Q filings; Q4 derived as fiscal year minus Q1–Q3. OCF is unwound from the year-to-date figures 10-Qs report. Compare to the same quarter a year ago — most businesses are seasonal.

Revenue by quarter

Q3'23: $1.4B

Q4'23: $1.3B

Q1'24: $1.3B

Q2'24: $1.2B

Q3'24: $1.2B

Q4'24: $1.3B

Q1'25: $1.3B

Q2'25: $1.3B

Q3'25: $1.4B

Q4'25: $1.4B

Q1'26: $1.6B

Q2'26: $1.7B

Q3'26: $1.8B

$0$500.0M$1.0B$1.5B

Net income by quarter

Q3'23: $288.0M

Q4'23: $226.0M

Q1'24: $172.0M

Q2'24: $126.0M

Q3'24: $389.0M

Q4'24: −$73.0M

Q1'25: $169.0M

Q2'25: $257.0M

Q3'25: $191.0M

Q4'25: $233.0M

Q1'26: $281.0M

Q2'26: $349.0M

Q3'26: $397.0M

$0$200.0M

Quarter	Revenue	YoY	Net income	YoY	EPS	OCF
Q3'26	$1.8B	+36.5%	$397.0M	+107.9%	2.30	$437.0M
Q2'26	$1.7B	+31.5%	$349.0M	+35.8%	2.02	$501.0M
Q1'26	$1.6B	+23.3%	$281.0M	+66.3%	1.63	$441.0M
Q4'25 *	$1.4B	+10.3%	$233.0M	—	1.35	$225.0M
Q3'25	$1.4B	+11.1%	$191.0M	−50.9%	1.10	$322.0M
Q2'25	$1.3B	+7.4%	$257.0M	+104.0%	1.49	$484.0M
Q1'25	$1.3B	+3.1%	$169.0M	−1.7%	0.97	$378.0M
Q4'24 *	$1.3B	−1.8%	−$73.0M	−132.3%	-0.41	$359.0M
Q3'24	$1.2B	−11.9%	$389.0M	+35.1%	2.22	$255.0M
Q2'24	$1.2B	−12.5%	$126.0M	−55.5%	0.72	$110.0M
Q1'24	$1.3B	−8.8%	$172.0M	−33.8%	0.98	$328.0M
Q4'23 *	$1.3B	−9.1%	$226.0M	−24.4%	1.27	$378.0M
Q3'23	$1.4B	+0.4%	$288.0M	−14.8%	1.61	$241.0M

Track record

Compound annual growth by period. For debt and share count, negative is the good direction.

Series	3y	5y	10y	15y
Revenue	−0.3%	+5.0%	+6.5%	—
Operating cash flow	+7.2%	+6.8%	+14.1%	—
Free cash flow	+10.1%	+7.3%	+16.3%	—
EPS (diluted)	−7.4%	+8.2%	+5.0%	—
Equity	+12.2%	+12.3%	+16.3%	—
LT debt	+12.2%	+7.2%	+8.7%	—
Diluted shares	−1.7%	−1.8%	+0.1%	—
Stock price	+45.7%	+16.0%	+27.7%	—

$100, 3 years ago

$309vs $192 in SPY

45.7% vs 24.4%/yr

$100, 5 years ago

$210vs $181 in SPY

16.0% vs 12.6%/yr

$100, 10 years ago

$1,152vs $428 in SPY

27.7% vs 15.6%/yr

The $1 test — market value created per $1 of earnings retained (Buffett's hurdle: at least $1)

Last 5 years

$2.55

$11.6B created / $4.5B retained

Last 10 years

$4.54

$29.0B created / $6.4B retained

Quality & capital discipline

Cash-based returns and how management deploys capital

Cash ROIC

16.7%

OCF ÷ (equity + debt)

OCF / EV yield

2.1%

MC vs 10× OCF

4.62

≤1 = priced under 10× OCF

Debt / FCF

2.0y

SBC / FCF

12.6%

Owner earnings

$1.1B

OCF − capex − SBC

OE yield

1.7%

Share count 5y

+0.3%

per year; negative = buybacks

Capital intensity

14.8%

net PP&E ÷ revenue

Sales efficiency

$0.17

new PP&E per $1 new revenue, 5y

Growth engine (5y): reinvested 50.7% of operating cash flow at an incremental return of 12.2% — an organically fundable growth rate of about 6.2% per year (growth ≈ reinvestment rate × incremental ROIC).

Checklist

21 of 26 checks pass · 81%. Checks with structurally missing inputs are excluded.

Growth & Consistency

6/7

Revenue growth
5.0% · 5y CAGR ≥ 5%
fail
EPS growth
8.2% · 5y CAGR ≥ 5%
pass
FCF growth
7.3% · 5y CAGR ≥ 5%
pass
Revenue rises consistently
7 of 9 · up in ≥ 7 of last 10 years
pass
FCF consistently positive
10 of 10 · positive in ≥ 8 of last 10 years
pass
Profitable every year
10 of 10 · net income > 0 in ≥ 8 of last 10
pass
Cash flow keeps up with sales
6.8% vs 5.0% · OCF CAGR ≥ 0.9× revenue CAGR
pass

Profitability

6/6

Net margin
15.8% · ≥ 8%
pass
Operating margin
16.3% · ≥ 10%
pass
Gross margin stable or rising
— · no drop > 2 pts over 3y
na
Return on equity
14.5% · ≥ 12%
pass
Cash ROIC
16.7% · ≥ 12%
pass
FCF margin
23.8% · ≥ 5%
pass
Earnings back their cash
OCF $1.4B vs NI $850.0M · OCF ≥ net income (latest FY)
pass

Balance Sheet

5/5

Debt payable from cash flow
2.0y · LT debt ≤ 3× FCF
pass
Cash cushion
74% · cash ≥ 50% of LT debt
pass
Leverage
0.43 · LT debt ≤ 1.5× equity
pass
Equity positive and compounding
$5.9B · equity > 0 and grew over ~5y
pass
Interest burden
11% · interest ≤ 15% of operating income
pass

Capital Allocation

4/4

Share count flat or shrinking
0.3% · ≤ +0.5%/yr over ~5y
pass
Stock comp restrained
13% · SBC ≤ 15% of FCF
pass
Distributions funded by FCF
29% · dividends + buybacks ≤ 100% of FCF
pass
Repurchases are a habit
9 of 10 · buybacks in ≥ 5 of last 10 years
pass

Valuation Discipline

0/4

FCF yield
2.0% · ≥ 3%
fail
Earnings multiple
76.7 · P/E ≤ 25
fail
Price asks less than history delivered
20.4% vs 16.3% · implied FCF growth ≤ historical FCF CAGR
fail
Shareholder yield
0.6% · dividends + buybacks ≥ 2% of market cap
fail

Financial data

As filed in 10-Ks; per-share figures split-adjusted. $ in millions.

FY	Revenue	Gross profit	Op income	Net income	EPS	OCF	CapEx	FCF	Dividends	Buybacks	SBC	Cash	LT debt	Equity	Shares
2025	5,375	—	876	850	4.91	1,409	128	1,281	—	375	162	1,873	2,534	5,881	173
2024	4,979	—	833	614	3.51	1,052	154	898	—	439	137	1,796	1,790	5,105	175
2023	5,464	—	1,358	1,057	5.91	1,408	197	1,211	—	702	135	2,472	1,195	4,654	179
2022	5,420	—	1,334	1,124	6.18	1,144	185	959	—	849	125	2,042	1,793	4,161	182
2021	4,941	—	1,080	894	4.78	1,322	174	1,148	—	673	103	2,052	1,791	3,784	187
2020	4,221	—	765	627	3.31	1,016	117	899	—	411	92	1,756	1,789	3,297	189
2019	4,303	—	711	621	3.25	998	120	878	—	159	82	1,598	1,788	3,004	191
2018	3,878	—	-394	165	0.86	555	132	423	—	120	59	913	1,291	2,433	191
2017	3,189	—	148	102	0.56	328	72	256	—	0	56	818	2,038	2,310	182
2016	2,918	—	406	335	1.95	420	91	329	—	62	49	783	1,093	1,513	172
2015	2,856	—	431	513	3.00	376	92	284	—	0	55	483	1,099	1,302	171
2014	2,933	—	469	392	2.35	563	70	493	—	0	43	810	1,099	769	167
2013	2,888	—	496	457	2.74	566	69	497	—	—	41	0	—	1,245	167

Some concepts are structurally absent for certain industries (banks report no gross profit or capex). Missing ≠ zero.

Compare with peers →·10-K filings on EDGAR ↗