Viavi Solutions (VIAV) AI Stock Analysis

• Market Cap: $2.12B
• Dividend Yield: N/A
• Average Volume (3M): 2.41M
• Price to Earnings (P/E): 451.4
• Beta (1Y): 1.16
• Revenue Growth: 3.34%
• EPS Growth: N/A
• Country: US
• Employees: 3,600
• Sector: Technology
• Sector Strength: 65
• Industry: Communication Equipment
• EPS (TTM): 0.15
• Shares Outstanding: 223,236,650
• 10 Day Avg. Volume: 3,590,596
• 30 Day Avg. Volume: 2,412,739
• PEG Ratio: 3.56
• Price to Book (P/B): 2.81
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 31.04
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 0.57
• Enterprise Value/Gross Profit: 3.85
• Enterprise Value/Ebitda: 6.96
• 1Y Price Target: $12.50
• Price Target Upside: 31.86% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

Viavi Solutions' overall stock score reflects a company with solid strategic moves and strong revenue growth but facing significant challenges. Key strengths include robust gross margins and strategic acquisitions, while low net margins, negative P/E, and technical indicators suggest caution. Improvements in operational efficiency and cash flow management are necessary for a better outlook.

Positive Factors

Acquisition Impact

The acquisition of Inertial Labs is viewed positively as it provides stronger exposure to a growing positioning, navigation, and timing market and is expected to improve operating margins.

Revenue Performance

Viavi Solutions Inc showed revenue strength in a typically slow quarter, driven by its core network equipment segment and increasing traction with cloud providers.

Negative Factors

Tariff Concerns

There is a new concern that re-pricing with tariff premiums could lead to order delays, impacting future quarter guidance.

Valuation Concerns

The valuation is considered full at 23x next twelve months price-to-earnings ratio, which impacts the analyst's recommendation to remain underweight on the stock.

Viavi Solutions Business Overview & Revenue Model

Company Description

Viavi Solutions Inc. provides network test, monitoring, and assurance solutions to communications service providers, enterprises, network equipment manufacturers, original equipment manufacturers, government, and avionics customers worldwide. The company operates through three segments: Network Enablement (NE), Service Enablement (SE), and Optical Security and Performance Products (OSP) segments. The NE segment offers testing solutions that access the network to perform build-out and maintenance tasks. This segment provides solutions that include instruments, software, and services to design, build, activate, certify, troubleshoot, and optimize networks; and instrumentation for communication and safety. It also offers support and professional services, such as repair, calibration, software support, and technical assistance for the products; and system integration projects, including project management, installation, and implementation, as well as product and technology training, and consulting services. The SE segment provides embedded systems and enterprise performance management solutions for communication service providers, enterprises, and cloud operators with visibility into network, service, and application data. Its solutions include instruments, microprobes, and software, which monitor, collect, and analyze network data to reveal the actual customer experience and to identify opportunities for new revenue streams and network optimization. The OSP segment offers optical products for anti-counterfeiting, consumer and industrial, government, automotive, and industrial markets. The company was formerly known as JDS Uniphase Corporation and changed its name to Viavi Solutions Inc. in August 2015. Viavi Solutions Inc. was founded in 1923 and is headquartered in Scottsdale, Arizona.

How the Company Makes Money

Viavi Solutions generates revenue through the sale of its network testing and monitoring products and services, which are essential for the deployment and maintenance of telecommunications infrastructures such as 5G networks and data centers. The company's Network Enablement segment contributes to revenue by providing testing and assurance solutions that help service providers and equipment manufacturers ensure network performance and reliability. Additionally, Viavi's Optical Security and Performance Products segment generates income through the sale of optical security solutions used in currency authentication and brand protection. Viavi also benefits from long-term contracts and partnerships with leading telecommunications companies and government agencies, which provide a steady stream of revenue through ongoing service and maintenance agreements.

Viavi Solutions Financial Statement Overview

Summary

Viavi Solutions shows a mixed financial performance. Strong gross profit margins are offset by low net profit margins and declining revenues. The balance sheet is stable with a balanced capital structure but shows low return on equity. Cash flow is inconsistent, indicating challenges in free cash generation relative to net income.

Income Statement

Viavi Solutions has shown a mixed performance in its income statement. The gross profit margin for TTM (Trailing-Twelve-Months) is strong at 57.57%, indicating efficient production processes. However, the net profit margin is only 0.49%, which suggests high operating costs or other expenses. Revenue has decreased over the last few years, with a notable decline from 2022 to 2023. The EBIT margin for TTM is 4.87%, and the EBITDA margin is 8.58%, both lower than previous years, reflecting pressure on operational efficiency.

Balance Sheet

The balance sheet shows moderate strength with a debt-to-equity ratio of 0.88, indicating a balanced capital structure. The return on equity (ROE) for TTM is 0.70%, which is low, suggesting limited profitability from shareholders' equity. However, the equity ratio is solid at 37.70%, highlighting a stable financial base with a fair proportion of assets funded by equity.

Cash Flow

Cash flow analysis reveals some concerns. The operating cash flow to net income ratio is healthy, suggesting good cash conversion from operations. However, free cash flow growth has been inconsistent, and the free cash flow to net income ratio shows variability, indicating potential challenges in free cash generation relative to net income. These factors suggest a need for stronger cash management strategies.

Breakdown
TTM	Jun 2024	Sep 2023	Sep 2022	Sep 2021	Jun 2020
Income Statement		Total Revenue
1.05B	1.00B	1.11B	1.29B	1.20B	1.14B
	Gross Profit
601.90M	575.90M	638.80M	773.50M	714.40M	665.30M
	EBIT
50.90M	20.80M	82.40M	185.00M	142.20M	118.10M
	EBITDA
89.70M	101.20M	154.10M	260.60M	237.40M	199.80M
	Net Income Common Stockholders
5.10M	-25.80M	25.50M	15.50M	46.10M	28.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
486.10M	491.20M	521.10M	561.30M	699.40M	540.50M
	Total Assets
1.74B	1.74B	1.85B	1.83B	1.96B	1.78B
	Total Debt
687.30M	687.20M	725.70M	684.90M	669.80M	603.70M
	Net Debt
229.60M	215.90M	219.20M	125.00M	-28.00M	64.70M
	Total Liabilities
1.04B	1.05B	1.16B	1.16B	1.19B	1.06B
	Stockholders Equity
705.10M	681.60M	690.80M	671.70M	774.80M	711.40M
Cash Flow		Free Cash Flow
66.10M	96.90M	63.00M	105.60M	191.20M	103.70M
	Operating Cash Flow
92.20M	116.40M	114.10M	178.10M	243.30M	135.60M
	Investing Cash Flow
-135.10M	-21.60M	-127.10M	-71.00M	-48.70M	-29.80M
	Financing Cash Flow
-33.90M	-125.70M	-50.00M	-210.40M	-58.80M	-71.70M

Viavi Solutions Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 9.48
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VIAV, the sentiment is Negative. The current price of 9.48 is below the 20-day moving average (MA) of 9.85, below the 50-day MA of 10.50, and below the 200-day MA of 9.84, indicating a bearish trend. The MACD of -0.38 indicates Positive momentum. The RSI at 34.90 is Neutral, neither overbought nor oversold. The STOCH value of 36.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VIAV.

Viavi Solutions Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TTMI	70 Outperform	$2.94B	38.60	5.02%	―	11.65%	―
VICR	65 Neutral	$1.99B	85.91	4.16%	―	-14.92%	-91.72%
PI	63 Neutral	$2.90B	58.72	-0.78%	―	21.80%	89.21%
Sector *	60 Neutral	$11.39B	10.50	-6.42%	2.97%	7.77%	-11.17%
VIAV	60 Neutral	$2.12B	451.43	0.71%	―	3.34%	―
POWI	55 Neutral	$3.08B	95.91	4.29%	1.51%	-5.75%	-41.75%
VSH	54 Neutral	$2.00B	26.74	-3.14%	3.04%	-11.31%	-127.88%

Viavi Solutions Corporate Events

Viavi Solutions to Acquire Spirent’s Ethernet Business

On March 3, 2025, VIAVI Solutions announced its agreement to acquire Spirent Communications plc’s High-Speed Ethernet and Network Security Business from Keysight Technologies for $410 million, with an additional contingent cash consideration of $15 million. This acquisition, expected to close in the second quarter of 2025, aims to enhance VIAVI’s product portfolio in ethernet, security, AI, and digital infrastructure markets, potentially adding $180 million to its NSE revenue in the first year and being accretive to EPS.