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what it is
Viavi sells the gear and software carriers and data-center builders use to test networks, fiber links, and secure physical products.
how it gets paid
Last year Viavi Solutions made $1.1B in revenue. network enablement was the main engine at $0.50B, or 46% of sales.
why it's growing
Revenue grew 8.4% last year. 56.8% gross margin matters most because margin → your pricing power → so it tells you the business still has a real moat even when.
what just happened
The quarter showed a weird split: revenue hit $668M, but EPS fell to -$0.31.
At a glance
B+ balance sheet — decent shape, but not bulletproof
55/100 earnings predictability — expect surprises
62.2x trailing p/e — you're paying up for this one
14.0% return on capital — nothing to write home about
xvary composite: 55/100 — below average
What they do
Viavi sells the gear and software carriers and data-center builders use to test networks, fiber links, and secure physical products.
Viavi owns 3,160 patents and serves customers that hate downtime. Switching costs (the pain of changing vendors) → replacing test systems across live networks is risky and expensive → once your tools are embedded, leaving is painful. A 56.8% gross margin from the latest quarter says customers are paying for trust, not just boxes.
How they make money
$1.1B
annual revenue · their business grew +8.4% last year
network enablement
$0.50B
service assurance
$0.22B
optical products
$0.22B
anti-counterfeiting solutions
$0.11B
commercial lasers
$0.06B
The products that matter
tests mobile networks
Wireless Services
$596M · 55% of revenue
it is the core engine at $596M, or 55% of total sales. If carrier and equipment budgets tighten, this is where you will see it first.
core driver
tests fixed-line networks
Broadband & Wireline
$380M · 35% of revenue
this segment contributes $380M, or 35% of sales. It matters because it keeps viavi tied to more than one network build cycle, but it does not diversify you out of telecom spend.
second engine
smaller supporting lines
Other
$108M · 10% of revenue
the remaining $108M is only 10% of revenue. That is not much cushion if the two main segments wobble at the same time.
small buffer
Key numbers
$2.0B
fy2027 sales goal
That is almost double today's $1.1B revenue base. Revenue → the money customers pay → so your whole bull case depends on Viavi turning a modest business into a much bigger one.
62.2x
trailing p/e
P/E (price-to-earnings) → how much investors pay for each dollar of profit → so you are paying up before the earnings ramp is fully visible.
5.3%
operating margin
Operating margin → profit after running the business → so Viavi still has a lot of room to prove it deserves a premium multiple.
14.0%
return on capital
Return on capital → profit from money invested in the business → so the company is decent, but not absurdly efficient for a stock priced this richly.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 35 / 100
- long-term debt $1.2B (15% of capital)
- net profit margin 17.0% — keeps 17 cents of every dollar in revenue
- return on equity 28% — $0.28 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in VIAV 3 years ago → it's now worth $27,980.
The index would have given you $14,540.
source: institutional data · total return
What just happened
missed estimates
The quarter showed a weird split: revenue hit $668M, but EPS fell to -$0.31.
Revenue surged 81% vs. prior year, but earnings moved the other way. That is the quiet part: growth showed up faster than clean profit conversion.
$668M
revenue
$0.31
eps
56.8%
gross margin
the number that mattered
56.8% gross margin matters most because margin (sales left after direct costs) → your pricing power → so it tells you the business still has a real moat even when EPS gets messy.
-
viavi posted good results for the second quarter of fiscal 2026. (year ends june 27th.) both the top and bottom lines came in slightly ahead of our expectations, with sales growth of 36% and earnings-per-share growth of 69% vs. prior year.
-
accordingly, we have raised our full-year estimates for both for fiscal 2026.
-
we anticipate that growth will continue in the years ahead, albeit at a more moderate rate.
-
for fiscal 2027, we expect sales to grow 11% vs. prior year, while earnings per share will likely advance by roughly 18%.a similar trend should continue through the early 2030s, with growth in profits slightly outpacing growth in sales, but healthy results on both counts. the more-rapid earnings growth is expected due to the company’s ongoing efforts to refocus its business on certain higher-growth, more-profitable segments, particularly defense applications and data centers for artificial intelligence (ai).
-
to that end, viavi announced a restructuring plan in late january.
source: company earnings report, 2026
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What could go wrong
the #1 risk is telecom capex slowing across wireless and wireline test demand.
med
telecom capex slowdown
Wireless services is 55% of revenue and broadband & wireline is another 35%. If carriers or equipment makers cut spend, about 90% of the business feels it.
impact: this is the straight line from a decent business to weaker revenue, weaker absorption, and a less forgiving multiple.
med
restructuring fails to lift margins
A restructuring plan was announced in late january. The latest quarter still shows a -13.0% net margin and -$0.21 EPS, so you are being asked to trust the fix before the numbers show it.
impact: if costs stay sticky, the raised estimates lose credibility and the stock loses one of its main supports.
med
valuation compresses toward consensus
The midpoint target is $24 against a $29.24 stock, while the high target shown here is $35. That leaves more room down to consensus than up to the optimistic case.
impact: even decent execution can disappoint if your entry price already assumes a clean recovery.
about 90% of VIAV's revenue comes from wireless plus broadband and wireline testing, and the stock already trades above the $24 analyst midpoint. That combination leaves less margin for error than the business quality alone suggests.
source: institutional data · regulatory filings · risk analysis
Pay attention to
risk
whether losses stay a one-quarter problem
The latest quarter shows -$0.21 EPS and a -13.0% net margin. If that repeats, the recovery case gets much harder to defend.
calendar
fiscal 2026 year-end results
Look for the next full-year print around late june 2026. You want proof that the raised fiscal 2026 estimates were earned, not just published.
metric
wireless revenue concentration
Wireless services is 55% of revenue. If that segment slows, there is not enough diversification elsewhere to hide it.
trend
whether 11% sales growth turns into earnings leverage
The page points to 11% sales growth for fiscal 2027. Revenue growth is not the win by itself. The win is margin recovery that makes the current multiple look less demanding.
Analyst rankings
short-term outlook
average
momentum score 3 — in human-speak, analysts do not see a strong near-term edge either way.
risk profile
average
stability score 3 — this is a middle-of-the-pack risk setup, not a bunker and not a rollercoaster.
chart momentum
below average
technical score 4 — the tape is not doing the stock any favors right now.
earnings predictability
55 / 100
earnings predictability at 55 means future quarters are harder to model than the average steady name. Expect surprises, and not always the fun kind.
source: institutional data
Institutional activity
institutions have been net buying for 2 consecutive quarters — 154 buyers vs. 114 sellers in 4q2025. total institutional holdings: 0.2B shares. net buying for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$10
$38
$29
current price
$24
target midpoint · 18% from current · 3-5yr high: $35 (+20% · 5% ann'l return)
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