Viavi Solutions Inc. (NASDAQ: VIAV)

Sector: Technology Industry: Communication Equipment CIK: 0000912093
Market Cap 6.16 Bn
P/B 7.38
P/E -146.56
P/S 4.95
ROIC (Qtr) 2.96
Div Yield % 0.00
Rev 1y % (Qtr) 36.37
Total Debt (Qtr) 1.28 Bn
Debt/Equity (Qtr) 1.53

About

VIAVI Solutions Inc., often referred to as VIAVI, is a leading provider of network test, monitoring, and assurance solutions for communications service providers (CSPs), hyperscalers, network equipment manufacturers (NEMs), original equipment manufacturers (OEMs), government, and avionics. The company operates in two primary business categories: Network and Service Enablement (NSE) and Optical Security and Performance Products (OSP). VIAVI's objective is to remain a top provider in the markets and industries it serves. The company's main business...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 770.20M provide 14.42x coverage of short-term debt 53.40M, demonstrating strong liquidity position and minimal refinancing risk.
  • Tangible assets of 1.65B provide exceptional 19.79x coverage of deferred revenue 83.60M, showing strong service capability backing.
  • Robust free cash flow of 81M exceeds capital expenditure of 24.10M by 3.36x, indicating strong organic growth funding capability.
  • Strong cash position of 770.20M provides 2.23x coverage of other current liabilities 344.80M, indicating excellent liquidity.
  • Cash reserves of 770.20M provide robust 1.57x coverage of current liabilities 489.60M, indicating strong short-term solvency.

Bear case

  • Operating cash flow of 105.10M barely covers its investment activities of (525.20M), with a coverage ratio of -0.20, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (525.20M) provide weak support for R&D spending of 229.10M, which is -2.29x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 770.20M provide limited coverage of acquisition spending of (521.60M), which is -1.48x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 105.10M provides insufficient coverage of deferred revenue obligations of 83.60M, which is 1.26x, raising concerns about future service delivery capabilities.
  • High receivables of 284.60M relative to inventory of 141M (2.02 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Communication Equipment
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CSCO Cisco Systems, Inc. 425.48 Bn 43.28 8.76 28.09 Bn
2 MSI Motorola Solutions, Inc. 71.64 Bn 127.93 11.87 9.81 Bn
3 CIEN Ciena Corp 38.46 Bn 311.86 8.06 1.58 Bn
4 LITE Lumentum Holdings Inc. 38.36 Bn 152.48 18.22 3.32 Bn
5 UI Ubiquiti Inc. 37.65 Bn 42.36 12.67 0.11 Bn
6 HPE Hewlett Packard Enterprise Co 30.92 Bn 12.11 1.03 22.37 Bn
7 ASTS AST SpaceMobile, Inc. 27.86 Bn -91.70 1,503.54 0.72 Bn
8 ZBRA Zebra Technologies Corp 12.90 Bn 25.19 2.45 2.32 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.30 2.55
EV to Cash from Ops. EV/CFO 60.89 10.31
EV to Debt EV to Debt 5.02 31.95
EV to EBIT EV/EBIT 621.32 87.00
EV to EBITDA EV/EBITDA 78.52 10.88
EV to Free Cash Flow [EV/FCF] EV/FCF 79.01 62.78
EV to Market Cap EV to Market Cap 1.04 1.09
EV to Revenue EV/Rev 5.15 38.48
Price to Book Value [P/B] P/B 7.38 3.65
Price to Earnings [P/E] P/E -146.56 21.22
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.61
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -24.04
Dividend per Basic Share Div per Share (Qtr) 0.00 0.23
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 4.73
Interest Coverage Int. cover (Qtr) 0.27 -11.69
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -44.31 -57.98
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 56.74 465.23
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.58
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 100.92 72.41
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 48.99 -8.57
EBIT Growth (1y) % EBIT 1y % (Qtr) -66.67 69.66
EBT Growth (1y) % EBT 1y % (Qtr) -4,014.29 -70.46
EPS Growth (1y) % EPS 1y % (Qtr) 0.00 8.86
FCF Growth (1y) % FCF 1y % (Qtr) -7.11 10.52
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 21.26 38.81
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.45 0.75
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.03
Cash Ratio Cash Ratio (Qtr) 1.57 1.35
Current Ratio Curr Ratio (Qtr) 2.61 2.84
Debt to Equity Ratio Debt/Equity (Qtr) 1.53 0.47
Interest Cover Ratio Int Coverage (Qtr) 0.27 -11.69
Times Interest Earned Times Interest Earned (Qtr) 0.27 -11.69
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 3.90 -41.21
EBIT Margin % EBIT Margin % (Qtr) 0.83 -52.62
EBT Margin % EBT Margin % (Qtr) -2.20 -59.46
Gross Margin % Gross Margin % (Qtr) 56.60 38.49
Net Profit Margin % Net Margin % (Qtr) -3.40 -60.82