Is Keysight Technologies (KEYS) Still a Buy Despite Its Skyrocketing Valuation?

In the world of semiconductor and electronic measurement, Keysight Technologies (KEYS) has long been a bellwether for innovation. Yet, as of November 2025, the stock trades at a trailing price-to-earnings (P/E) ratio of 62.09 and a price-to-sales (P/S) ratio of 5.74, figures that starkly contrast with industry benchmarks. This raises a critical question: Is KEYS still a compelling buy, or has its valuation outpaced its fundamentals?

Valuation Metrics: A Tale of Two Ratios

KEYS' valuation appears stretched when compared to its peers. The trailing P/E of 62.09 dwarfs the electronic sector's average P/E of 24.6, while its P/S ratio of 5.74 is more than double the 2.62 average for the consumer electronics industry according to industry data. These metrics suggest investors are paying a premium for KEYS' earnings and revenue, betting on its ability to sustain high growth. However, such premiums often come with risks-if growth falters, valuations can correct swiftly.

KEYS' forward P/E ratio, at 21.88 according to financial data, offers a more tempered view, implying that analysts expect earnings to catch up with the current price. Yet, even this metric exceeds the sector average, signaling that KEYS remains a high-multiple play.

Growth Potential: Can KEYS Justify the Hype?

KEYS' 2025 results provide a mixed picture. Full-year revenue rose 8% to $5.375 billion, with Q4 growth accelerating to 10% year-over-year. Earnings per share (EPS) growth was stronger still, surging 14% annually to $7.16. The company also generated robust free cash flow ($1.3 billion), enabling $375 million in share repurchases and funding R&D initiatives.

Looking ahead, KEYS has guided for Q1 2026 revenue of $1.53–$1.55 billion, a 19% year-over-year increase at the midpoint. Analysts project annual revenue growth of 7.7% and EPS growth of 13.1% through 2026. These figures, if achieved, would validate the optimism embedded in KEYS' valuation. However, the path to sustained growth hinges on macroeconomic conditions and demand for advanced testing solutions in AI, 5G, and quantum computing-sectors where KEYS holds a strategic edge.

### PEG Ratio: A More Nuanced Lens
The PEG ratio, which adjusts the P/E for growth expectations, offers further insight. KEYS' PEG ratio ranges from 1.09 to 1.95, depending on the data source. A PEG above 1 typically suggests a stock is overvalued relative to its growth prospects. Yet, given KEYS' role in cutting-edge technologies and its track record of outperforming earnings estimates, some investors may view the PEG as fairly balanced.

The Verdict: Buy, But With Caution

KEYS' valuation is undeniably rich, but its growth trajectory and competitive positioning in high-margin markets could justify the premium. The company's ability to reinvest in R&D and execute strategic acquisitions adds to its long-term appeal. However, investors must weigh the risks of a potential slowdown in tech spending or margin compression.

For those with a high-risk tolerance and a multi-year horizon, KEYS remains a compelling bet-if the company can deliver on its ambitious growth targets. But for value-oriented investors, the current multiples may warrant patience until valuations align more closely with earnings.