We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
VIAV Stock Rises 430.7% in a Year: How to Play the Stock
Read MoreHide Full Article
Key Takeaways
VIAV shares rose 430.7% in a year, beating its industry, sector and the S&P 500.
AI data center expansion is driving demand for VIAV's lab, production and field-testing solutions.
Spirent assets may add about $200M annual revenue; 91% of $352.6M RPO is due within 12 months.
Viavi, Solutions, Inc. (VIAV - Free Report) shares have skyrocketed 430.7% in the past year compared with the industry’s growth of 350.7%. The stock has outperformed the Zacks Computer & Technology sector and the S&P 500 during the same time frame.
Image Source: Zacks Investment Research
The company has outperformed its peers like Keysight Technologies, Inc. (KEYS - Free Report) but underperformed Ciena Corporation (CIEN - Free Report) . Shares of Keysight have jumped 113.7%, and shares of Ciena have risen 609.8%.
AI Data Centers, Aerospace & Defense are Major Growth Drivers
Viavi is benefiting from rapid AI infrastructure expansion by hyperscalers, semiconductor companies, optical module vendors and networking equipment manufacturers. Demand for the company's lab, production and field-testing solutions remains robust. Growing investment in higher-speed optical transport, silicon photonics, PCIe interconnects and high-speed Ethernet technologies is driving demand for VIAV’s solutions. The company expects this momentum to continue in fiscal 2026.
It continues to see strong demand from aerospace and defense customers, primarily for its positioning, navigation and timing solutions. The company's acquisitions of Inertial Labs and Jackson Labs have expanded its capabilities in this market.
The acquisition of Spirent's high-speed Ethernet, network security and channel emulation product lines is performing better than expected. Management expects the acquired business to contribute approximately $200 million in annual revenue, above the initial estimate of $188 million. The acquisition also expands Viavi's presence among enterprise customers and strengthens its position in high-speed Ethernet testing. This is a critical component in AI data center expansion. Strong focus on innovation allows it to gain a competitive edge against other major players such as Keysight, Ciena and Teradyne.
Strong Backlog, Robust Liquidity and Cash Generation are Positives
The company continues to generate healthy cash flow. Viavi generated $31 million in operating cash flow and $22.5 million in free cash flow during Q1 FY26. This ensures strong financial flexibility for acquisitions, debt reduction and generates greater returns for shareholders.
Viavi ended the quarter with remaining performance obligations (RPO) of $352.6 million. This represents contracted business that has yet to be recognized as revenue. Importantly, management expects approximately 91% of this amount to convert into revenue within the next 12 months. Such a substantial backlog reflects healthy customer demand across the company's end markets.
Estimate Revision Trend
The company’s earnings estimates for 2026 and 2027 have improved over the past 60 days.
Image Source: Zacks Investment Research
Key Valuation Metric of VIAV
From a valuation standpoint, VIAV is currently trading at a discount compared to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 40.56 forward 12-month earnings, lower than 52.74 for the industry.
Image Source: Zacks Investment Research
End Note
Revenue growth in Network and Service Enablement is supported by increased demand from the data center ecosystem, including hyperscalers and semiconductor-driven infrastructure. Viavi highlighted continued momentum across scale-up and scale-out architectures, driven by AI workloads and high-speed interconnect technologies. This demand is expected to persist throughout 2026, supporting sustained growth in lab, production, and field-testing solutions. The integration of Spirent’s high-speed Ethernet and network security testing assets continues to contribute to revenue growth. Hence, with a Zacks rank #2 (Buy), Viavi appears to be a good investment option at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
VIAV Stock Rises 430.7% in a Year: How to Play the Stock
Key Takeaways
Viavi, Solutions, Inc. (VIAV - Free Report) shares have skyrocketed 430.7% in the past year compared with the industry’s growth of 350.7%. The stock has outperformed the Zacks Computer & Technology sector and the S&P 500 during the same time frame.
Image Source: Zacks Investment Research
The company has outperformed its peers like Keysight Technologies, Inc. (KEYS - Free Report) but underperformed Ciena Corporation (CIEN - Free Report) . Shares of Keysight have jumped 113.7%, and shares of Ciena have risen 609.8%.
AI Data Centers, Aerospace & Defense are Major Growth Drivers
Viavi is benefiting from rapid AI infrastructure expansion by hyperscalers, semiconductor companies, optical module vendors and networking equipment manufacturers. Demand for the company's lab, production and field-testing solutions remains robust. Growing investment in higher-speed optical transport, silicon photonics, PCIe interconnects and high-speed Ethernet technologies is driving demand for VIAV’s solutions. The company expects this momentum to continue in fiscal 2026.
It continues to see strong demand from aerospace and defense customers, primarily for its positioning, navigation and timing solutions. The company's acquisitions of Inertial Labs and Jackson Labs have expanded its capabilities in this market.
The acquisition of Spirent's high-speed Ethernet, network security and channel emulation product lines is performing better than expected. Management expects the acquired business to contribute approximately $200 million in annual revenue, above the initial estimate of $188 million. The acquisition also expands Viavi's presence among enterprise customers and strengthens its position in high-speed Ethernet testing. This is a critical component in AI data center expansion. Strong focus on innovation allows it to gain a competitive edge against other major players such as Keysight, Ciena and Teradyne.
Strong Backlog, Robust Liquidity and Cash Generation are Positives
The company continues to generate healthy cash flow. Viavi generated $31 million in operating cash flow and $22.5 million in free cash flow during Q1 FY26. This ensures strong financial flexibility for acquisitions, debt reduction and generates greater returns for shareholders.
Viavi ended the quarter with remaining performance obligations (RPO) of $352.6 million. This represents contracted business that has yet to be recognized as revenue. Importantly, management expects approximately 91% of this amount to convert into revenue within the next 12 months. Such a substantial backlog reflects healthy customer demand across the company's end markets.
Estimate Revision Trend
The company’s earnings estimates for 2026 and 2027 have improved over the past 60 days.
Image Source: Zacks Investment Research
Key Valuation Metric of VIAV
From a valuation standpoint, VIAV is currently trading at a discount compared to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 40.56 forward 12-month earnings, lower than 52.74 for the industry.
Image Source: Zacks Investment Research
End Note
Revenue growth in Network and Service Enablement is supported by increased demand from the data center ecosystem, including hyperscalers and semiconductor-driven infrastructure. Viavi highlighted continued momentum across scale-up and scale-out architectures, driven by AI workloads and high-speed interconnect technologies. This demand is expected to persist throughout 2026, supporting sustained growth in lab, production, and field-testing solutions. The integration of Spirent’s high-speed Ethernet and network security testing assets continues to contribute to revenue growth. Hence, with a Zacks rank #2 (Buy), Viavi appears to be a good investment option at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.