Unpacking Q2 Earnings: Keysight (NYSE:KEYS) In The Context Of Other Inspection Instruments Stocks

As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at inspection instruments stocks, starting with Keysight (NYSE:KEYS).

Measurement and inspection instrument companies may enjoy more steady demand because products such as water meters are non-discretionary and mandated for replacement at predictable intervals. In the last decade, digitization and data collection have driven innovation in the space, leading to incremental sales. But like the broader industrials sector, measurement and inspection instrument companies are at the whim of economic cycles. Interest rates, for example, can greatly impact civil, commercial, and residential construction projects that drive demand.

The 7 inspection instruments stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was 1.5% below.

Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.

Luckily, inspection instruments stocks have performed well with share prices up 24.8% on average since the latest earnings results.

Keysight (NYSE:KEYS)

Spun off from Hewlett-Packard in 2014, Keysight (NYSE:KEYS) offers electronic measurement products for use in various sectors.

Keysight reported revenues of $1.22 billion, down 11.9% year on year. This print exceeded analysts’ expectations by 1.9%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ earnings and operating margin estimates.

Keysight delivered the slowest revenue growth of the whole group. Interestingly, the stock is up 15% since reporting and currently trades at $159.39.

Is now the time to buy Keysight? Access our full analysis of the earnings results here, it’s free.

Best Q2: Badger Meter (NYSE:BMI)

The developer of the world’s first frost-proof water meter in 1905, Badger Meter (NYSE:BMI) provides water control and measure equipment to various industries.

Badger Meter reported revenues of $216.7 million, up 23.2% year on year, outperforming analysts’ expectations by 6.5%. The business had a stunning quarter with an impressive beat of analysts’ operating margin estimates and a solid beat of analysts’ earnings estimates.

Badger Meter delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 16% since reporting. It currently trades at $225.23.

Is now the time to buy Badger Meter? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Mirion (NYSE:MIR)

With its monitoring devices installed on spacecraft, Mirion (NYSE:MIR) offers radiation technology to government agencies, healthcare providers, and industrial companies.

Mirion reported revenues of $207.1 million, up 5% year on year, falling short of analysts’ expectations by 1.7%. It was a disappointing quarter, leaving some shareholders looking for more.

Interestingly, the stock is up 32.2% since the results and currently trades at $13.62.

Read our full analysis of Mirion’s results here.

FARO (NASDAQ:FARO)

Launched by two PhD students in a garage, FARO (NASDAQ:FARO) provides 3D measurement and imaging systems for the manufacturing, construction, engineering, and public safety industries.

FARO reported revenues of $82.09 million, down 6.9% year on year. This result missed analysts’ expectations by 1.9%. It was a slower quarter as it also recorded revenue guidance for next quarter missing analysts’ expectations.

FARO had the weakest performance against analyst estimates among its peers. The stock is up 23.2% since reporting and currently trades at $17.78.

Read our full, actionable report on FARO here, it’s free.

Iteris (NASDAQ:ITI)

Originally serving as a business incubator for technology companies, Iteris (NASDAQ:ITI) provides applied informatics for transportation and agriculture.

Iteris reported revenues of $45.78 million, up 5.1% year on year. This result beat analysts’ expectations by 3.6%. Aside from that, it was a satisfactory quarter as it also logged full-year revenue guidance exceeding analysts’ expectations but a miss of analysts’ earnings estimates.

Iteris pulled off the highest full-year guidance raise among its peers. The stock is up 68% since reporting and currently trades at $7.19.

Read our full, actionable report on Iteris here, it’s free.

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