Keysight Stock Surges Pre-Market After Q4 Earnings Beat But Analysts Divided On Recovery Timeline: Retail’s Jubilant

Keysight Technologies Inc. ($KEYS) stock rallied nearly 10% in pre-market trading on Wednesday as the company topped fourth-quarter earnings estimates and raised its guidance for the upcoming quarter.

Keysight reported earnings of $1.65 per share, surpassing analyst estimates of $1.57. Revenue came in at $1.29 billion, above the anticipated $1.26 billion. 

Despite a 1.53% dip in revenue year-on-year (YoY), largely attributed to a one-time $315 million tax expense, both retail investors and Wall Street analysts remain largely unfazed, with many expressing confidence in Keysight’s future recovery.

Deutsche Bank expects Keysight to return to top-line growth in fiscal Q1 after five consecutive quarters of declines. It has raised its price target on Keysight to $180 from $175 and maintained a ‘Buy’ rating. 

Meanwhile, Morgan Stanley stated that the Q4 performance was “largely as previewed, and better than feared for investors.” The brokerage raised its price target on Keysight to $180 from $165, maintaining an ‘Overweight’ rating.

Bank of America (BofA), on the other hand, believes that while Keysight’s fourth-quarter earnings show stability, the pace of recovery remains uncertain. It has raised its price target to $160 from $150 but has kept an ‘Underperform’ rating on the shares. 

Keysight Technologies Inc. Sentiment and Message Volume on Nov 20 as of 8:20 a.m. ET | Source: Stocktwits

Retail sentiment on Stocktwits surged to ‘extremely bullish’ (92/100) from ‘neutral’ ahead of the earnings while chatter remained ‘extremely high’ – the highest level seen in the last one year, albeit on multiple occasions. 

Comments on the platform indicate that many retail investors saw the surge in stock price coming as call flow volume jumped ahead of earnings. 

Keysight guided first-quarter revenue for fiscal 2025 to fall between $1.265 billion and $1.285 billion, with earnings expected to range from $1.65 to $1.71 per share.

Citing the company’s bullish forecast, Baird has increased its price target to $180 from $163 and reaffirmed its ‘Outperform’ rating.

Similarly, Barclays raised its price target to $200 from $180, while keeping an ‘Overweight’ rating on the stock.

Amid profitability concerns and market demand challenges, Keysight’s stock has only gained 7% so far this year.