21.39 USD
+0.69 (+3.33%)
We assign a fundamental rating of 4 out of 10 to VIAV. VIAV was compared to 48 industry peers in the Communications Equipment industry. There are concerns on the financial health of VIAV while its profitability can be described as average. VIAV is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- VIAV had positive earnings in the past year.
- VIAV had a positive operating cash flow in the past year.
- Of the past 5 years VIAV 4 years were profitable.
- Each year in the past 5 years VIAV had a positive operating cash flow.
1.2 Ratios
- VIAV has a Return On Assets (0.73%) which is in line with its industry peers.
- The Return On Equity of VIAV (2.10%) is better than 60.42% of its industry peers.
- VIAV has a Return On Invested Capital (2.69%) which is in line with its industry peers.
- VIAV had an Average Return On Invested Capital over the past 3 years of 3.35%. This is significantly below the industry average of 12.17%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.73% | ||
| ROE | 2.1% | ||
| ROIC | 2.69% |
ROA(3y)0.55%
ROA(5y)1.19%
ROE(3y)1.46%
ROE(5y)3.1%
ROIC(3y)3.35%
ROIC(5y)5.84%
1.3 Margins
- The Profit Margin of VIAV (1.33%) is better than 60.42% of its industry peers.
- In the last couple of years the Profit Margin of VIAV has declined.
- VIAV has a better Operating Margin (4.72%) than 60.42% of its industry peers.
- VIAV's Operating Margin has declined in the last couple of years.
- VIAV's Gross Margin of 57.11% is fine compared to the rest of the industry. VIAV outperforms 77.08% of its industry peers.
- VIAV's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.72% | ||
| PM (TTM) | 1.33% | ||
| GM | 57.11% |
OM growth 3Y-27.88%
OM growth 5Y-12.89%
PM growth 3Y38.83%
PM growth 5Y-5.74%
GM growth 3Y-1.45%
GM growth 5Y-0.44%
2. Health
2.1 Basic Checks
- VIAV has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- The number of shares outstanding for VIAV has been increased compared to 1 year ago.
- VIAV has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, VIAV has an improved debt to assets ratio.
2.2 Solvency
- Based on the Altman-Z score of -43.89, we must say that VIAV is in the distress zone and has some risk of bankruptcy.
- With a Altman-Z score value of -43.89, VIAV is not doing good in the industry: 85.42% of the companies in the same industry are doing better.
- The Debt to FCF ratio of VIAV is 10.31, which is on the high side as it means it would take VIAV, 10.31 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of VIAV (10.31) is comparable to the rest of the industry.
- VIAV has a Debt/Equity ratio of 0.91. This is a neutral value indicating VIAV is somewhat dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.91, VIAV is doing worse than 81.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | 10.31 | ||
| Altman-Z | -43.89 |
ROIC/WACC0.28
WACC9.55%
2.3 Liquidity
- A Current Ratio of 1.99 indicates that VIAV should not have too much problems paying its short term obligations.
- VIAV has a Current ratio (1.99) which is in line with its industry peers.
- VIAV has a Quick Ratio of 1.74. This is a normal value and indicates that VIAV is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 1.74, VIAV is in line with its industry, outperforming 58.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.99 | ||
| Quick Ratio | 1.74 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 80.65% over the past year.
- The Earnings Per Share has been decreasing by -8.43% on average over the past years.
- VIAV shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.60%.
- VIAV shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.93% yearly.
EPS 1Y (TTM)80.65%
EPS 3Y-20.63%
EPS 5Y-8.43%
EPS Q2Q%150%
Revenue 1Y (TTM)15.6%
Revenue growth 3Y-5.68%
Revenue growth 5Y-0.93%
Sales Q2Q%25.57%
3.2 Future
- The Earnings Per Share is expected to grow by 37.20% on average over the next years. This is a very strong growth
- The Revenue is expected to grow by 15.75% on average over the next years. This is quite good.
EPS Next Y45.46%
EPS Next 2Y34.27%
EPS Next 3Y37.2%
EPS Next 5YN/A
Revenue Next Year28.45%
Revenue Next 2Y18.17%
Revenue Next 3Y15.75%
Revenue Next 5YN/A
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 38.20, the valuation of VIAV can be described as expensive.
- VIAV's Price/Earnings ratio is a bit cheaper when compared to the industry. VIAV is cheaper than 64.58% of the companies in the same industry.
- VIAV is valuated rather expensively when we compare the Price/Earnings ratio to 28.82, which is the current average of the S&P500 Index.
- With a Price/Forward Earnings ratio of 25.24, VIAV can be considered very expensive at the moment.
- VIAV's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. VIAV is cheaper than 64.58% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.95. VIAV is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.2 | ||
| Fwd PE | 25.24 |
4.2 Price Multiples
- VIAV's Enterprise Value to EBITDA is on the same level as the industry average.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of VIAV indicates a slightly more expensive valuation: VIAV is more expensive than 62.50% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 60.97 | ||
| EV/EBITDA | 40.4 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- VIAV's earnings are expected to grow with 37.20% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.84
PEG (5Y)N/A
EPS Next 2Y34.27%
EPS Next 3Y37.2%
5. Dividend
5.1 Amount
- No dividends for VIAV!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
VIAVI SOLUTIONS INC / VIAV FAQ
What is the ChartMill fundamental rating of VIAVI SOLUTIONS INC (VIAV) stock?
ChartMill assigns a fundamental rating of 4 / 10 to VIAV.
What is the valuation status for VIAV stock?
ChartMill assigns a valuation rating of 3 / 10 to VIAVI SOLUTIONS INC (VIAV). This can be considered as Overvalued.
Can you provide the profitability details for VIAVI SOLUTIONS INC?
VIAVI SOLUTIONS INC (VIAV) has a profitability rating of 5 / 10.
Can you provide the PE and PB ratios for VIAV stock?
The Price/Earnings (PE) ratio for VIAVI SOLUTIONS INC (VIAV) is 38.2 and the Price/Book (PB) ratio is 6.6.
Can you provide the expected EPS growth for VIAV stock?
The Earnings per Share (EPS) of VIAVI SOLUTIONS INC (VIAV) is expected to grow by 45.46% in the next year.