tiprankstipranks
Trending News
More News >
Viavi Solutions (VIAV)
NASDAQ:VIAV

Viavi Solutions (VIAV) AI Stock Analysis

Compare
816 Followers

Top Page

VI

Viavi Solutions

(NASDAQ:VIAV)

Rating:60Neutral
Price Target:
Viavi Solutions' stock score reflects a balanced view of strengths and weaknesses. The company benefits from strong gross margins and strategic acquisitions, yet faces challenges with high valuation, inconsistent cash flow, and cautious future guidance due to tariffs. Technical indicators suggest limited positive momentum, requiring careful consideration for potential investors.
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.
Market Recovery
Evidence of the NA Service Provider recovery is well underway, leading to an upgrade of VIAV stock to Buy.
Revenue Strength
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
OSP Segment Challenges
Weakness was observed in the Optical Security and Performance (OSP) segment, with 3D sensing demand remaining softer and anti-counterfeiting volumes stabilizing gradually.
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 (VIAV) vs. SPDR S&P 500 ETF (SPY)

Viavi Solutions Business Overview & Revenue Model

Company DescriptionViavi Solutions Inc. is a global provider of network test, monitoring, and assurance solutions to communications service providers, enterprises, and network equipment manufacturers. The company operates primarily in two segments: Network Enablement (NE) and Optical Security and Performance Products (OSP). Viavi's core offerings include solutions for fiber optic testing, wireless network testing, and optical security features for banknotes.
How the Company Makes MoneyViavi Solutions generates revenue through the sale of its network test and measurement solutions and optical security products. In the Network Enablement segment, the company earns money by providing testing equipment and software solutions for network performance and service assurance. This includes fiber optic test instruments, wireless network test systems, and related software and services. In the Optical Security and Performance Products segment, Viavi earns revenue by supplying optical security technologies used in currency authentication and brand protection. Key factors contributing to its earnings include its extensive product portfolio, strong relationships with major telecom operators, and ongoing innovation in network testing and security technologies.

Viavi Solutions Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q3-2025)
|
% Change Since: -12.02%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong revenue growth, increased operating margins, and promising performance in the aerospace and defense segment. However, concerns about tariffs impacting future revenue and cash flow from operations being lower than last year tempered the overall positive outlook. The sentiment is balanced by both optimistic growth metrics and cautious guidance regarding tariffs and cash flow.
Q3-2025 Updates
Positive Updates
Strong Revenue Growth
Net revenue for the third quarter was $284.8 million, up 5.2% sequentially and 15.8% year-over-year, above the midpoint of the guidance range.
Increased Operating Margin
Operating margin for the third fiscal quarter was 16.7%, above the high-end of the guidance range of 13% to 15%, and increased 7.4% year-over-year.
Significant EPS Growth
Earnings per share (EPS) at $0.15 was above the high-end of the guidance range and increased by $0.09 year-over-year.
NSE Revenue Surge
NSE revenue for the quarter was $208.2 million, up 22.6% year-over-year, driven by strong demand in fiber lab and production products.
Strong Performance in Aerospace and Defense
The aerospace and defense segment saw strong growth, bolstered by the acquisition of Inertial Labs, contributing to multi-year growth potential.
OSP Operating Margin at High End
OSP operating margin was 33.9%, at the high end of the guidance range of 32% to 34%.
Negative Updates
Impact of Tariffs
Tariffs expected to impact revenue and gross margin, with an anticipated $3 million impact on orders and EPS negatively affected by $0.01.
Decreased Cash Flow from Operating Activities
Cash flow from operating activities for the quarter was $7.8 million, down from $19.5 million in the same period last year, mainly due to the acquisition of Inertial Labs.
SE Gross Margin Decline
SE gross margin decreased by 90 basis points year-over-year due to product mix.
Flat Revenue Guidance for Q4
Fiscal fourth-quarter revenue is expected to remain flat relative to the strong third quarter, with potential delays in customer orders due to tariffs.
Company Guidance
During the Viavi Solutions fiscal third quarter 2025 earnings call, the company provided guidance for the upcoming fourth quarter, with expected revenue ranging from $278 million to $290 million, indicating a flat performance relative to the strong third quarter revenue of $284.8 million. The operating margin is anticipated to be 13.5%, plus or minus 1%, and EPS is forecast between $0.10 and $0.13. The NSE segment is projected to generate approximately $208 million in revenue, while the OSP segment is expected to achieve about $76 million. The guidance reflects a cautious approach due to potential impacts from newly imposed U.S. tariffs, anticipated to affect the gross margin by roughly $3 million and EPS by approximately $0.01. The company plans to realign its supply chain within six months to mitigate further tariff impacts.

Viavi Solutions Financial Statement Overview

Summary
Viavi Solutions presents a mixed financial picture. Strong gross margins (57.57%) and a balanced capital structure (debt-to-equity ratio of 0.88) are offset by low net profit margin (0.49%) and inconsistent free cash flow growth. Improvements in revenue growth and cost management are necessary.
Income Statement
65
Positive
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
70
Positive
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
60
Neutral
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
TTMJun 2024Sep 2023Sep 2022Sep 2021Jun 2020
Income StatementTotal Revenue
1.05B1.00B1.11B1.29B1.20B1.14B
Gross Profit
601.90M575.90M638.80M773.50M714.40M665.30M
EBIT
50.90M20.80M82.40M185.00M142.20M118.10M
EBITDA
89.70M101.20M154.10M260.60M237.40M199.80M
Net Income Common Stockholders
5.10M-25.80M25.50M15.50M46.10M28.70M
Balance SheetCash, Cash Equivalents and Short-Term Investments
396.80M491.20M521.10M561.30M699.40M540.50M
Total Assets
1.93B1.74B1.85B1.83B1.96B1.78B
Total Debt
640.90M687.20M725.70M684.90M669.80M603.70M
Net Debt
266.70M215.90M219.20M125.00M-28.00M64.70M
Total Liabilities
1.20B1.05B1.16B1.16B1.19B1.06B
Stockholders Equity
728.80M681.60M690.80M671.70M774.80M711.40M
Cash FlowFree Cash Flow
66.10M96.90M63.00M105.60M191.20M103.70M
Operating Cash Flow
92.20M116.40M114.10M178.10M243.30M135.60M
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 Price9.37
Price Trends
50DMA
9.68
Negative
100DMA
10.51
Negative
200DMA
10.01
Negative
Market Momentum
MACD
-0.08
Negative
RSI
47.12
Neutral
STOCH
79.30
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 9.37 is above the 20-day moving average (MA) of 9.28, below the 50-day MA of 9.68, and below the 200-day MA of 10.01, indicating a neutral trend. The MACD of -0.08 indicates Negative momentum. The RSI at 47.12 is Neutral, neither overbought nor oversold. The STOCH value of 79.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VIAV.

Viavi Solutions Risk Analysis

Viavi Solutions disclosed 31 risk factors in its most recent earnings report. Viavi Solutions reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Viavi Solutions Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$3.68B48.855.02%11.65%
73
Outperform
$2.07B89.594.16%-5.61%-18.63%
62
Neutral
$11.93B10.60-7.51%3.00%7.40%-8.09%
60
Neutral
$2.13B453.330.71%3.34%
PIPI
59
Neutral
$3.36B58.72-0.78%21.80%89.21%
55
Neutral
$3.27B89.325.03%1.45%-5.75%-41.75%
VSVSH
51
Neutral
$2.16B26.74-3.14%2.50%-11.31%-127.88%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
VIAV
Viavi Solutions
9.37
1.94
26.11%
POWI
Power Integrations
57.79
-15.51
-21.16%
TTMI
TTM Technologies
36.58
18.01
96.98%
VICR
Vicor
45.43
10.22
29.03%
VSH
Vishay Intertechnology
15.90
-6.73
-29.74%
PI
IMPINJ
111.02
-43.37
-28.09%

Viavi Solutions Corporate Events

Private Placements and FinancingM&A TransactionsBusiness Operations and Strategy
Viavi Solutions Plans Term Loan for Acquisition
Positive
May 19, 2025

On May 20, 2025, Viavi Solutions Inc. plans to present to prospective lenders regarding a proposed term loan financing to support its acquisition of Spirent Communications plc’s high-speed ethernet and network security business lines. This move is part of Viavi’s strategy to expand its capabilities and market presence, with the financing also expected to support general corporate purposes.

The most recent analyst rating on (VIAV) stock is a Sell with a $9.50 price target. To see the full list of analyst forecasts on Viavi Solutions stock, see the VIAV Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.