Keysight Technologies Inc. (KEYS - Free Report) recently announced that its test solutions have been adopted by DEKRA for the certification of 5G New Radio (NR) and vehicle-to-everything (V2X) devices.
DEKRA will use Keysight’s solutions to ensure that 5G devices are safe for human interaction and are in compliance with various regulatory bodies like the 3GPP and the Federal Communications Commission (FCC).
The company’s 5G NR test solutions provide comprehensive certification testing for next-generation devices equipped with 5G NR connectivity.
Robust adoption of the company’s test solutions boosts its top-line growth.
Keysight Technologies Inc. Price and Consensus
High Demand to Favor Business Prospects
Keysight’s 5G NR test solutions have been witnessing solid demand in recent times. Markedly, the company’s solutions suite was also adopted by major U.S. mobile operators to validate more than 600 test cases for their respective 5G NR device acceptance plans.
Moreover, Keysight’s solutions were selected by Korea Testing Laboratory and the Global Certification Forum for the certification of 5G NR devices.
Further, the company extended its collaboration with China Academy of Information and Communications Technology (CAICT) to accelerate the 5G new radio (NR) base station performance test plan in the country.
On the back of ongoing deal wins, we believe Keysight is well positioned to address the 5G endpoint installed base market, which per MarketsAndMarkets, is expected to witness a CAGR of 55.4% between 2020 and 2025, primarily driven by the acceleration in 5G investment.
COVID-19 Likely to be a Headwind
Nevertheless, the global COVID-19 pandemic is expected to have negatively impacted Keysight’s growth ambitions
Notably, the company recently provided an updated outlook stating it may not be able to meet its guidance for second-quarter fiscal 2020, as it has been forced to temporarily shut down several of its global locations due to the outbreak.
However, amid the market disruptions and uncertainty, Keysight’s focus on emerging markets like IoT and high-speed data centers holds promise. Additionally, medical devices and pharmaceutical markets hold immense potential courtesy of growing usage of electronics-based testing equipment.
Further, as employees are being forced to work from home due to the COVID-19 pandemic, there is an increasing demand for high-speed connectivity. As a result, Keysight’s investments in 5G and IoT are likely to favor its growth prospects in the days ahead.
Zacks Rank & Stocks to Consider
Currently, Keysight carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are SAP SE (SAP - Free Report) , Garmin Ltd. (GRMN - Free Report) and Microsoft Corporation (MSFT - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for SAP, Garmin and Microsoft is currently pegged at 9.5%, 7.4% and 13.2%, respectively.
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