A Fresh Look at Viavi Solutions (VIAV) Valuation After Analyst Price Target Increase and Business Expansion Moves

Viavi Solutions (VIAV) is turning heads as the company gains momentum in expanding its footprint beyond traditional markets. Recent moves into data center and aerospace sectors, along with key acquisitions, have drawn fresh investor interest.

See our latest analysis for Viavi Solutions.

Viavi’s share price has climbed 25% over the past three months and boasts a year-to-date gain of almost 25%. The one-year total shareholder return stands at 37%. Momentum is clearly building, as investors respond positively to expansion moves, successful acquisitions, and the company’s pivot into new growth verticals.

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But with analysts raising their price targets and the company riding a wave of expansion, investors must ask: does Viavi still offer an undervalued entry point, or is all the future growth already reflected in its current price?

Most Popular Narrative: 11.9% Undervalued

With Viavi Solutions shares closing at $12.59 compared to a narrative fair value estimate of $14.29, there is a clear gap suggesting more upside according to the most followed view. This narrative combines major catalysts and analyst assumptions to build its case for a higher future price.

Viavi is experiencing robust and sustained demand across the data center ecosystem, with customers updating optical connectivity to 400G, 800G, and now 1.6T. This is enabling multi-year upgrade cycles and expanding its total addressable market, which should drive structural revenue growth through 2026 and beyond.

Read the complete narrative.

Curious how the math stacks up? The narrative relies on ambitious growth, margin, and profit projections to justify its valuation increase. Could Viavi's next act be surprisingly lucrative? Dive in and see which key numbers have analysts betting on this target.

Result: Fair Value of $14.29 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent weak demand among service providers or integration setbacks from new acquisitions could quickly challenge the bullish thesis regarding Viavi’s outlook.

Find out about the key risks to this Viavi Solutions narrative.

Another View: Multiples Send a Warning

Taking a look from another angle, Viavi Solutions trades at a lofty price-to-earnings ratio of 80.6x, which is much higher than both the US Communications industry average of 29.7x and its peer average of 27.5x. Even compared to a fair ratio of 52x, Viavi's current valuation signals a premium price tag. This gap introduces real valuation risk. How long can such enthusiasm last if growth slows or expectations disappoint?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Viavi Solutions Narrative

If you think there’s more to the story, or want to see where your own research leads, you can create and test your own view in under three minutes. Then share your perspective with others: Do it your way.

A great starting point for your Viavi Solutions research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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