Should You Buy Keysight Stock Today?

by Rob Otman
keysight-stock-keysight-earnings-0

Keysight (NYSE: KEYS) is a midcap company that operates within the electronic equipment industry. Its market cap is $8 billion today, and the total one-year return is 27.06% for shareholders.

keysight-stock-keysight-earnings-1

Keysight stock is beating the market, and it reports earnings tonight. But does that make it a good buy today? To answer this question, we've turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.

Our system looks at six key metrics...

Earnings-per-Share (EPS) Growth: Keysight reported a recent EPS growth rate of 72.97%. That's below the electronic equipment industry average of 753.06%. That's not a good sign. We like to see companies that have higher earnings growth.

Price-to-Earnings (P/E): The average price-to-earnings ratio of the electronic equipment industry is 48.93. And Keysight's ratio comes in at 19.44. It's trading at a better value than many of its competitors.

Debt-to-Equity The debt-to-equity ratio for Keysight stock is 66.32. That's above the electronic equipment industry average of 48.76. That's not a good sign. Keysight's debt levels should be lower.

Free Cash Flow per Share Growth Keysight's FCF has been higher than that of its competitors over the last year. That's good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It's one of our most important fundamental factors.

Profit Margins The profit margin of Keysight comes in at 15.01% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Keysight's profit margin is above the electronic equipment average of 10.25%. So that's a positive indicator for investors.

Return on Equity Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for Keysight is 25.08%, and that's above its industry average ROE of 14.4%.

Keysight stock passes four of our six key metrics today. That's why our Investment U Stock Grader rates it as a Buy With Caution.

keysight-stock-keysight-earnings-2

Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That's why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth. For more details, click here.

IU Stock Grader