Back to top

Image: Bigstock

Viavi (VIAV) to Offer Testing Solutions to Auray in Taiwan

Read MoreHide Full Article

Viavi Solutions Inc. (VIAV - Free Report) recently announced that its testing solutions have been selected by Auray Technology Corp. for its upcoming open testing and integration center (OTIC) and security lab in Kaohsiung City, Taiwan. This is likely to augment VIAV’s market position as one of the leading providers of network test, monitoring and service enablement solutions worldwide.

An OTIC offers a collaborative, open and impartial working environment to test and certify conformance with O-RAN (Open Radio Access Network) standards. The new Auray lab will utilize Viavi’s TM500 and TeraVM validation solutions to facilitate end-to-end testing for lab validation, field deployment and service assurance, adhering to the O-RAN specifications.

Viavi boasts a comprehensive product portfolio that offers end-to-end network visibility and analytics that help build, test, certify, maintain and optimize complex physical and virtual networks. The company’s wireless and fiber test solutions are in the early stages of a multi-year investment cycle, fueled by the transition of OEMs and service providers to superfast 5G networks. The healthy growth traction is further demonstrated by the upside in wireless & fiber test, 3D sensing products, optical transport, Ethernet, broadband access, video test and storage network testing markets.

The 5G transition is expected to be disruptive in nature, potentially creating new avenues for industries across the board. 5G is likely to augment the telecommunications industry's scalability, security and universal mobility, thus propelling the proliferation of IoT. Telecom firms are enabling customers to move away from an economy-of-scale network operating model to demand-driven operations. They are ensuring seamless migration to 5G by offering easy programmability and flexible automation. The convergence of network technologies requires significant investments from traditional carriers (telecom and cable) and cloud service providers. Viavi’s solutions are well-positioned to meet these rapidly changing industry trends, given its technology prowess, product depth and wide customer base.

Viavi engages in targeted restructuring activities to consolidate its operations and better align businesses with evolving market conditions and investment strategies. The company pursues a holistic growth model with strategic acquisitions and focused organic improvement plans. Of late, the OSP (Optical Security and Performance Products) segment has been benefiting from strong demand for 3D sensing and anti-counterfeiting products. The company expects to leverage major secular growth trends in 5G wireless, fiber and 3D sensing to achieve higher revenues and profitability with greater flexibility in the capital structure.

Demand for sophisticated anti-counterfeiting features, which consumers can easily validate without using special tools but are difficult to create or simulate using conventional printing technology, has led to the exponential growth of Viavi’s OSP segment. The custom optics products of the company offer an array of advanced technologies and precision optics to meet customers' specific requirements. Its 3D sensing optical filters and Engineered Diffusers are deployed in smartphones for facial recognition biometric authentication. In addition, optical filters and sensors deployed in autonomous vehicles and IoT devices offer lucrative opportunities for the company.

The stock has lost 34.1% in the past year against the industry’s growth of 0.7%.

Zacks Investment Research
Image Source: Zacks Investment Research

Viavi currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Key Picks

Arista Networks, Inc. (ANET - Free Report) , sporting a Zacks Rank #1, is likely to benefit from the strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 17.5% and delivered an earnings surprise of 12.7%, on average, in the trailing four quarters.

It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.

Juniper Networks, Inc. (JNPR - Free Report) carries a Zacks Rank #2. It has a long-term earnings growth expectation of 7% and delivered an earnings surprise of 1.6%, on average, in the trailing four quarters.

Juniper is leveraging the 400-gig cycle to capture hyperscale switching opportunities inside the data center. The company is set to capitalize on the increasing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence.

Deutsche Telekom AG (DTEGY - Free Report) , sporting a Zacks Rank #1, is likely to benefit from the accretive post-merger integration of T-Mobile US Inc. and Sprite in the United States, in which it owns about 43% stake. The removal of forced cable TV access in multiple dwelling units in Germany through telecom legislation is likely to help Deutsche Telekom expand its broadband market.

Moreover, an aggressive fiber rollout strategy across the country is expected to augment its domestic market hold. The Zacks Consensus Estimate for current-year earnings for Deutsche Telekom has been revised 21.8% upward over the past year. It has a VGM Score of A and a long-term earnings growth expectation of 15.7%.

Published in