Keysight's (KEYS) Solutions To Aid Telcos With 5G Deployment

Keysight Technologies Inc. (NYSE:KEYS) boasts of a robust 5G portfolio comprising comprehensive set of test and design solutions enabling telecom companies in accelerating 5G deployment.

The company recently inked Memorandum of Understanding (MoU) with Korea-based SK Telecom. The collaboration is primarily aimed at design development of 5G devices including performance validation and verification of technologies.

Both the companies intend to work together to address the requirements of beamforming and Massive MIMO (multiple input, multiple output) technologies, essential for achieving 5G standard data speed and lower latency levels.

Additionally, Keysight also announced extended collaboration with China Telecom in a bid to facilitate deployment of 5G on a commercial scale. Keysight’s robust 5G new radio (“NR”) network emulation offerings will enable trials for China Telecom’s 5G NR devices.

China Telecom will also leverage Keysight’s 5G test solutions to confirm whether the new products are complying with the latest version of 3GPP 5G NR Release 15.

We believe adoption of company’s 5G testing and design solutions are anticipated to bolster top-line growth. The new collaborations are likely to enable the company in expanding presence in Asia Pacific.

Strategic 5G Deals to Benefit Top Line

Keysight’s 5G collaborations with the likes of ASUS, Motorola (NYSE:MSI), Verizon Communications (NYSE:VZ) and Qualcomm (NASDAQ:QCOM) Technologies, Inc., a subsidiary of Qualcomm are enabling it in achieving 5G commercialization related milestones.

The company’s sustained focus on launching new solutions for growth markets like 5G, Internet of Things (IoT) and high-speed datacenters bodes well for the top line. Recently, the company introduced S9100A, a scalable and compact 5G base station. The new manufacturing test solution is aimed at enabling accelerated deployment of 5G networks.

Additionally, the acquisitions of Ixia, Anite and AT4 Wireless have enriched the company’s 5G solutions portfolio. In fact, Keysight stated that orders for 5G solutions recorded triple-digit growth year over year in the last reported quarter.

Encouraging 5G Trends

Per ResearchAndMarkets data, global 5G market is expected to reach $251 billion by 2025, at a CAGR of around 97% from 2020. Further, per MarketsandMarkets estimates, communication test and measurement market is projected to be $6.69 billion by 2020 at a CAGR of 9.3% from the valuation of approximately $4.28 billion in 2015.

Intensive infrastructure investments for 5G push and favorable trial testing results are positives in this regard. Smart connected homes, hospitals, factories and cities along with self-driving vehicles remain key beneficiaries of 5G.

We believe on the heels of the aforementioned factors, Keysight is well poised to capitalize on the ongoing positive trends in the 5G market and strengthen its competitive position in the domain.

Zacks Rank &Stocks to Consider

Keysight carries a Zacks Rank #3 (Hold).

SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) , Cadence Design Systems, Inc. (NASDAQ:CDNS) and Intel Corporation (NASDAQ:INTC) are stocks worth considering in the sector. All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for SS&C, Cadence and Intel are pegged at 13.5%, 12% and 8.4%, respectively.

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