Bull Of The Day: Keysight Technologies (KEYS)

Keysight Technologies (KEYS - Free Report) is a $19 billion provider of electronic design, measurement and test instrumentation systems. Keysight emerged as a public company from the 2014 move by Agilent Technologies to split apart divisions. 

KEYS provides specialized electronics solutions to dozens of industries including aerospace and defense, automotive and energy, telecommunications, government and education, and, of course, semiconductors.

Keysight calls the top 25 technology enterprises in the world customers, and 78 of the Fortune 100, including Alphabet (GOOGL - Free Report) , Amazon (AMZN - Free Report) , AT&T, Broadcom, Boeing, Cisco, Microsoft (MSFT - Free Report) , NVIDIA (NVDA - Free Report) , Samsung, Tesla (TSLA - Free Report) and Toyota.

In fiscal 2019 (ended October), the company generated revenues of $4.312 billion, up 10% over the 2018 tally. In its Q4 reported on November 26, KEYS delivered sales of $1.122 billion, up 7% year over year.

Keysight generated 40.5% of non-GAAP revenues from Americas in fourth-quarter fiscal 2019. Meanwhile, revenues from Europe and Asia Pacific came in at 15.4% and 44.1%, respectively.

Evolving for the Hyper-Speed IoT/5G/AI World

As Keysight has prepared itself for advanced capabilities in wireless and mobile data environments, management sees a transformation from a hardware-centric product company to a software-centric solutions one.

In the company's most recent investor presentation in May, they outlined the evolution of their new "go-to-market" strategy thus...

Old model of scattered selling across separate channels to multiple divisions:

  • Individual Products with hardware bias
  • Slower, complex decision-making due to multiple owners interfacing with customers
  • Incentivized and compensated on “parts” of a solution 

New model of total system designs:

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Kevin Cook is a Senior Stock Strategist for Zacks Investment Research where he runs the TAZR Trader and more

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