DCF Tool

KEYS

Keysight Technologies Inc – Instruments and Related Products Manufacturing for Measuring, Displaying, and Controlling Industrial Process Variables
Keysight Technologies, Inc. (NYSE: KEYS) is a leading technology company that helps enterprises, service providers and governments accelerate innovation to connect and secure the world. Keysight's solutions optimize networks and bring electronic products to market faster and at a lower cost with offerings from design simulation, to prototype validation, to manufacturing test, to optimization in networks and cloud environments. Customers span the worldwide communications ecosystem, aerospace and defense, automotive, energy, semiconductor and general electronics end markets. Keysight generated revenues of $4.2B in fiscal year 2020.
Analysis Results
Intrinsic Value $1,644.26
Latest Price $157.36
Relative Value 90% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 65.2%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 9.3%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 65.2%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 3.99 3.65
2023 6.6 5.52
2024 10.9 8.35
2025 18.0 12.6
2026 29.8 19.1
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 417 billion. This corresponds to a present value of 245 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 49.3 billion. Adding in the terminal value gives a total present value of 294 billion.

There are presently 179.0 million outstanding shares, so the intrinsic value per share is 1644.26.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 7,668,000,000
Current Cash 4,104,000,000
Current Liabilities 2,618,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 946,000,000
Change in NCWC 409,000,000
EBIT 2,126,000,000
Tax Provision 232,000,000
Depreciation and Amortization 586,000,000
Capital Expenditure -348,000,000
Unlevered Free Cash Flow 2,528,825,742
Current Assets 3,374,000,000
Current Cash 1,756,000,000
Current Liabilities 1,081,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 537,000,000
Change in NCWC -77,000,000
EBIT 721,000,000
Tax Provision 134,000,000
Depreciation and Amortization 326,000,000
Capital Expenditure -117,000,000
Unlevered Free Cash Flow 726,043,363
Current Assets 3,215,000,000
Current Cash 1,598,000,000
Current Liabilities 1,003,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 614,000,000
Change in NCWC 112,000,000
EBIT 711,000,000
Tax Provision 94,000,000
Depreciation and Amortization 308,000,000
Capital Expenditure -120,000,000
Unlevered Free Cash Flow 917,525,874
Current Assets 2,378,000,000
Current Cash 913,000,000
Current Liabilities 1,462,000,000
Current Debt 499,000,000
Non-Cash Working Capital (NCWC) 502,000,000
Change in NCWC -48,000,000
EBIT 363,000,000
Tax Provision -576,000,000
Depreciation and Amortization 310,000,000
Capital Expenditure -132,000,000
Unlevered Free Cash Flow 493,000,000
Current Assets 2,177,000,000
Current Cash 818,000,000
Current Liabilities 819,000,000
Current Debt 10,000,000
Non-Cash Working Capital (NCWC) 550,000,000
Change in NCWC 123,000,000
EBIT 239,000,000
Tax Provision 77,000,000
Depreciation and Amortization 225,000,000
Capital Expenditure -72,000,000
Unlevered Free Cash Flow 412,189,944
Current Assets 1,854,000,000
Current Cash 783,000,000
Current Liabilities 644,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 427,000,000
Change in NCWC 17,000,000
EBIT 406,000,000
Tax Provision 31,000,000
Depreciation and Amortization 134,000,000
Capital Expenditure -91,000,000
Unlevered Free Cash Flow 431,612,021
Current Assets 1,579,000,000
Current Cash 483,000,000
Current Liabilities 686,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 410,000,000
Change in NCWC 139,000,000
EBIT 431,000,000
Tax Provision -125,000,000
Depreciation and Amortization 99,000,000
Capital Expenditure -92,000,000
Unlevered Free Cash Flow 577,000,000

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