Viavi Solutions Inc (VIAV, Financial) has recently caught the attention of investors with its notable stock performance. The company's market capitalization stands at $2.35 billion, with a current stock price of $10.56. Over the past week, VIAV has seen a 1.14% gain, and over the past three months, the stock has surged by an impressive 13.55%. This growth is particularly significant when considering the company's GF Value, which is currently at $11.93. This figure suggests that the stock is modestly undervalued, a positive shift from its past GF Value of $12.95, which indicated a possible value trap. These numbers reflect a promising trajectory for VIAV, as the company moves from a position where investors were advised to think twice, to a more favorable investment opportunity.
Introduction to Viavi Solutions Inc
Viavi Solutions Inc operates within the hardware industry, specializing in network test, monitoring, and assurance solutions. The company's diverse portfolio extends to high-performance thin-film optical coatings, which are utilized across various sectors including anti-counterfeiting, 3D sensing, and defense. Viavi's business is segmented into Network Enablement, Service Enablement, and Optical Security and Performance Products, with the United States being its primary revenue source. This strategic positioning allows VIAV to cater to a broad range of customers, from communications service providers to military and avionics clients.
Assessing Viavi's Profitability
Viavi Solutions Inc's Profitability Rank is a solid 6/10, indicating a reasonable level of profitability. The company's Operating Margin is at 5.85%, outperforming 60.33% of its peers in the industry. When it comes to ROE, VIAV stands at 0.72%, which is better than 36.81% of companies in the same space. The ROA is at 0.27%, surpassing 38.24% of competitors, and the ROIC is 0.75%, which is more favorable than 37.72% of similar companies. Additionally, Viavi has maintained profitability for 6 out of the past 10 years, a record that is better than 38.16% of companies in the industry.
Growth Prospects of Viavi Solutions
The Growth Rank for Viavi Solutions stands at 4/10, reflecting moderate growth potential. The company's 3-Year Revenue Growth Rate per Share is 0.30%, which is better than 37.86% of the industry. Over a 5-year period, the Revenue Growth Rate per Share has been 4.50%, outpacing 56.04% of competitors. Notably, the 3-Year EPS without NRI Growth Rate is an impressive 36.80%, which is higher than 75.67% of companies in the same sector. These growth metrics suggest that while VIAV's revenue growth is modest, its earnings growth is robust and could be a key driver for future stock performance.
Notable Shareholders in Viavi Solutions
Viavi Solutions Inc's shareholder composition includes several prominent investors. Steven Cohen (Trades, Portfolio) is the leading holder with 1,040,318 shares, representing 0.47% of the company. Following closely is Ken Fisher (Trades, Portfolio), holding 935,542 shares, which equates to 0.42% of VIAV. First Eagle Investment (Trades, Portfolio) also has a significant stake, with 639,437 shares, making up 0.29% of the company. The presence of these notable investors may instill confidence in potential shareholders, as these figures often reflect a belief in the company's future prospects.
Competitive Landscape
When comparing Viavi Solutions to its competitors, we see that it holds a competitive market capitalization of $2.35 billion. Viasat Inc (VSAT, Financial) is slightly behind with a market cap of $2.25 billion, while Extreme Networks Inc (EXTR, Financial) has a market cap of $1.57 billion. Impinj Inc (PI, Financial) stands out with a higher market cap of $3 billion. These comparisons provide context to VIAV's market position, indicating that it is a significant player within its industry.
Conclusion: Viavi Solutions' Market Position and Valuation
In summary, Viavi Solutions Inc has demonstrated a strong stock performance with a recent 13.55% gain over three months, and its current valuation suggests that it is modestly undervalued according to the GF Value. The company's profitability and growth metrics, while not industry-leading, are solid and indicate potential for future growth. The shareholder composition, featuring respected investors, and its competitive market cap relative to peers, further solidify its standing in the market. As Viavi Solutions continues to navigate the hardware industry landscape, its current trajectory suggests a positive outlook for value investors seeking opportunities.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
