Taking everything into account, VIAV scores 4 out of 10 in our fundamental rating. 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.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

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 comparable to the rest of the industry.
VIAV has a better Return On Equity (2.10%) than 60.42% of its industry peers.
The Return On Invested Capital of VIAV (2.69%) is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for VIAV is significantly below the industry average of 12.16%.

		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

VIAV has a better Profit Margin (1.33%) than 60.42% of its industry peers.
In the last couple of years the Profit Margin of VIAV has declined.
With a decent Operating Margin value of 4.72%, VIAV is doing good in the industry, outperforming 60.42% of the companies in the same industry.
VIAV's Operating Margin has declined in the last couple of years.
With a decent Gross Margin value of 57.11%, VIAV is doing good in the industry, outperforming 77.08% of the companies in the same industry.
In the last couple of years the Gross Margin of VIAV has remained more or less at the same level.

		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%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so VIAV 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

VIAV has an Altman-Z score of -43.52. This is a bad value and indicates that VIAV is not financially healthy and even has some risk of bankruptcy.
VIAV's Altman-Z score of -43.52 is on the low side compared to the rest of the industry. VIAV is outperformed by 85.42% of its industry peers.
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.
VIAV has a Debt to FCF ratio (10.31) which is in line with its industry peers.
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	-43.52

ROIC/WACC0.28

WACC9.56%

2.3 Liquidity

VIAV has a Current Ratio of 1.99. This is a normal value and indicates that VIAV is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of VIAV (1.99) is comparable to the rest of the industry.
A Quick Ratio of 1.74 indicates that VIAV should not have too much problems paying 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

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

VIAV shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 96.97%, which is quite impressive.
Measured over the past years, VIAV shows a decrease in Earnings Per Share. The EPS has been decreasing by -8.43% on average per year.
The Revenue has grown by 23.51% in the past year. This is a very strong growth!
VIAV shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.93% yearly.

EPS 1Y (TTM)96.97%

EPS 3Y-20.63%

EPS 5Y-8.43%

EPS Q2Q%69.23%

Revenue 1Y (TTM)23.51%

Revenue growth 3Y-5.68%

Revenue growth 5Y-0.93%

Sales Q2Q%36.37%

3.2 Future

VIAV is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 37.20% yearly.
VIAV is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 15.75% yearly.

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.

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4. Valuation

4.1 Price/Earnings Ratio

VIAV is valuated quite expensively with a Price/Earnings ratio of 39.37.
Compared to the rest of the industry, the Price/Earnings ratio of VIAV indicates a somewhat cheap valuation: VIAV is cheaper than 62.50% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 28.41. VIAV is valued slightly more expensive when compared to this.
With a Price/Forward Earnings ratio of 30.20, 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 60.42% of the companies in the same industry.
VIAV's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.64.

		Industry Rank	Sector Rank
PE	39.37
Fwd PE	30.2

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as VIAV.
Based on the Price/Free Cash Flow ratio, VIAV is valued a bit more expensive than the industry average as 62.50% of the companies are valued more cheaply.

		Industry Rank	Sector Rank
P/FCF	72.95
EV/EBITDA	47.34

4.3 Compensation for Growth

VIAV's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as VIAV's earnings are expected to grow with 37.20% in the coming years.