GrowthTurtle
Data Science PhD & IEEE Fellow, Ex-Two Sigma
Viavi looks expensive against its cash earnings: at 23x, versus the 11x its industry usually gets, it trades 77% above the high end of a $17.76–$22.60 fair range. That range is 11x next year's cash earnings, give or take 12%, and leans on a forecast 69% above trailing earnings. This is a valuation read only, with no fundamental work. x.com
Viavi is the toll booth on silicon photonics, the chokepoint Nvidia's Rubin platform is built around: every 1.6T transceiver is validated on its test gear before production. It gets paid by every transceiver vendor regardless of who wins the 1.6T design slots, yet at 8.8x sales and 40x earnings it trades below pure plays like Lumentum and Coherent. The 800G-to-1.6T transition is mid-ramp and accelerating into 2026 alongside Rubin, and production qualification is not optional. x.com x.com x.com
Viavi Solutions is one of the best ways to play co-packaged optics and photonics, and the dilution-driven dip is a good entry. Viavi is raising $500M to repay its $450M Term Loan B, about 2% dilution that cleans up the balance sheet, yet shares fell almost 6% after hours. At roughly 39x 2027 estimates it is cheap versus photonics and CPO peers, and fundamentally less risky. CPO is a 2028-and-beyond story, so this is a longer-term holding. x.com x.com x.com x.com x.com
Viavi's earnings were incredible, with revenue up 52.5% to $443.1M and non-GAAP operating margin rising to 24.0% from 14.4%. Non-GAAP EPS jumped to $0.34 from $0.13, which should drive a huge day for the stock. x.com
Viavi Solutions can reach $90-$100 by 2028 as earnings scale and it keeps its rerating as an AI hardware enabler. It once traded at 13-16x forward earnings as slow-growth telecom instrumentation, but now trades near 38x 2027 estimates. Consensus non-GAAP EPS rises from about $0.94 in FY2026 to $1.83 by FY2028, and a bull case with stronger Spirent synergies reaches $2.25-$2.50. As a premier testing bottleneck for 1.6T and 3.2T optical deployments, it can sustain a 38-40x multiple. x.com
