Keysight Technologies Offers Enough Quality Growth To Support A Robust Valuation

There are plenty of sayings (and cliches) regarding valuation and quality in the investment world, but it is nevertheless true that quality, value, and price are all distinct characteristics. I mention this because I think it’s an important backdrop for looking at Keysight Technologies (NYSE:KEYS). This leader in electronic design and test and measurement tools isn’t conventionally cheap, but I do think the less-cyclical nature of the business, the quality of the business, and the longer-term growth and margin potential combine to make a stronger value call than the multiples might otherwise suggest.

I’m not saying that Keysight is cheap, but I do think investors can expect to get solid value for the money here. I do see some risk that macro headwinds could prove stronger than the Street expects in calendar 2023, but I like the company’s long-term leverage to macro trends like data traffic growth, connectivity, and electrification. At $165 or below this would feel like an easier (or safer) call, but even at today’s price I think long-term investors can reasonably expect to be happy with the long-term returns.

 

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Keysight Technologies Offers Enough Quality Growth To Support A Robust Valuation