For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Keysight Technologies, Inc.'s (NYSE:KEYS) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers.
How Well Did KEYS Perform?
KEYS's trailing twelve-month earnings (from 31 July 2019) of US$312m has jumped 29% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -18%, indicating the rate at which KEYS is growing has accelerated. What's the driver of this growth? Let's take a look at if it is merely a result of an industry uplift, or if Keysight Technologies has seen some company-specific growth.
In terms of returns from investment, Keysight Technologies has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 5.8% is below the US Electronic industry of 6.8%, indicating Keysight Technologies's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Keysight Technologies’s debt level, has declined over the past 3 years from 15% to 14%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 1.0% to 61% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Recent positive growth doesn’t necessarily mean it’s onwards and upwards for the company. There may be factors that are influencing the entire industry thus the high industry growth rate over the same time period. You should continue to research Keysight Technologies to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for KEYS’s future growth? Take a look at our free research report of analyst consensus for KEYS’s outlook.
- Financial Health: Are KEYS’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 July 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.