Taking everything into account, KEYS scores 6 out of 10 in our fundamental rating. KEYS was compared to 124 industry peers in the Electronic Equipment, Instruments & Components industry. KEYS has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. KEYS has a correct valuation and a medium growth rate. These ratings could make KEYS a good candidate for quality investing.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year KEYS was profitable.
KEYS had a positive operating cash flow in the past year.
In the past 5 years KEYS has always been profitable.
In the past 5 years KEYS always reported a positive cash flow from operatings.

1.2 Ratios

KEYS has a better Return On Assets (7.52%) than 87.10% of its industry peers.
Looking at the Return On Equity, with a value of 14.45%, KEYS belongs to the top of the industry, outperforming 81.45% of the companies in the same industry.
KEYS has a better Return On Invested Capital (7.01%) than 70.97% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for KEYS is in line with the industry average of 8.83%.

		Industry Rank	Sector Rank
ROA	7.52%
ROE	14.45%
ROIC	7.01%

ROA(3y)8.77%

ROA(5y)10.34%

ROE(3y)16.4%

ROE(5y)19.97%

ROIC(3y)10.18%

ROIC(5y)11.65%

1.3 Margins

KEYS's Profit Margin of 15.81% is amongst the best of the industry. KEYS outperforms 94.35% of its industry peers.
KEYS's Profit Margin has been stable in the last couple of years.
KEYS has a Operating Margin of 16.30%. This is amongst the best in the industry. KEYS outperforms 91.13% of its industry peers.
KEYS's Operating Margin has been stable in the last couple of years.
With an excellent Gross Margin value of 62.08%, KEYS belongs to the best of the industry, outperforming 94.35% of the companies in the same industry.
In the last couple of years the Gross Margin of KEYS has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	16.3%
PM (TTM)	15.81%
GM	62.08%

OM growth 3Y-12.84%

OM growth 5Y-1.26%

PM growth 3Y-8.64%

PM growth 5Y1.26%

GM growth 3Y-0.83%

GM growth 5Y0.68%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), KEYS is destroying value.
The number of shares outstanding for KEYS has been reduced compared to 1 year ago.
The number of shares outstanding for KEYS has been reduced compared to 5 years ago.
The debt/assets ratio for KEYS is higher compared to a year ago.

2.2 Solvency

An Altman-Z score of 5.96 indicates that KEYS is not in any danger for bankruptcy at the moment.
KEYS's Altman-Z score of 5.96 is fine compared to the rest of the industry. KEYS outperforms 75.81% of its industry peers.
KEYS has a debt to FCF ratio of 1.98. This is a very positive value and a sign of high solvency as it would only need 1.98 years to pay back of all of its debts.
KEYS has a Debt to FCF ratio of 1.98. This is in the better half of the industry: KEYS outperforms 77.42% of its industry peers.
KEYS has a Debt/Equity ratio of 0.43. This is a healthy value indicating a solid balance between debt and equity.
KEYS has a worse Debt to Equity ratio (0.43) than 64.52% of its industry peers.
Even though the debt/equity ratio score it not favorable for KEYS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.

		Industry Rank	Sector Rank
Debt/Equity	0.43
Debt/FCF	1.98
Altman-Z	5.96

ROIC/WACC0.46

WACC15.13%

2.3 Liquidity

KEYS has a Current Ratio of 2.35. This indicates that KEYS is financially healthy and has no problem in meeting its short term obligations.
KEYS has a Current ratio of 2.35. This is comparable to the rest of the industry: KEYS outperforms 50.81% of its industry peers.
KEYS has a Quick Ratio of 1.78. This is a normal value and indicates that KEYS is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.78, KEYS is in line with its industry, outperforming 55.65% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	2.35
Quick Ratio	1.78

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

KEYS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.22%, which is quite good.
Measured over the past years, KEYS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.07% on average per year.
The Revenue has been growing slightly by 7.95% in the past year.
The Revenue has been growing slightly by 4.95% on average over the past years.

EPS 1Y (TTM)14.22%

EPS 3Y-2.14%

EPS 5Y8.07%

EPS Q2Q%15.76%

Revenue 1Y (TTM)7.95%

Revenue growth 3Y-0.28%

Revenue growth 5Y4.95%

Sales Q2Q%10.26%

3.2 Future

KEYS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.76% yearly.
Based on estimates for the next years, KEYS will show a quite strong growth in Revenue. The Revenue will grow by 8.41% on average per year.

EPS Next Y15.42%

EPS Next 2Y14.98%

EPS Next 3Y13.43%

EPS Next 5Y14.76%

Revenue Next Year15.76%

Revenue Next 2Y10.99%

Revenue Next 3Y9.19%

Revenue Next 5Y8.41%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 30.17 indicates a quite expensive valuation of KEYS.
64.52% of the companies in the same industry are more expensive than KEYS, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 27.30. KEYS is around the same levels.
A Price/Forward Earnings ratio of 26.14 indicates a quite expensive valuation of KEYS.
Based on the Price/Forward Earnings ratio, KEYS is valued a bit cheaper than the industry average as 62.10% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 24.32. KEYS is around the same levels.

		Industry Rank	Sector Rank
PE	30.17
Fwd PE	26.14

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as KEYS.
Based on the Price/Free Cash Flow ratio, KEYS is valued a bit cheaper than 70.97% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	28.83
EV/EBITDA	32.63

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates KEYS does not grow enough to justify the current Price/Earnings ratio.
KEYS has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as KEYS's earnings are expected to grow with 13.43% in the coming years.