Viavi Solutions: Strong Profit Growth Makes Valuation More Attractive

Investor Overview 3.06K Followers Follow Summary Viavi Solutions delivered robust revenue and profit growth, driven by AI data centers, optical testing, and aerospace & defense demand. Despite a higher valuation, I rate VIAV a Buy at $37, anticipating further upside as margins expand and growth accelerates in key segments. Data center operations, especially 1.6T and CPO technologies, are the main growth engines, complemented by resilient aerospace & defense revenue streams. Key risks include dependency on AI capex cycles, customer concentration, and weak free cash flow, but FY2028 earnings projections support the bullish thesis. J Studios/DigitalVision via Getty Images Viavi Solutions ( VIAV ) has shown very strong revenue and profit growth over the past year. This is mostly due to AI data centers, higher demand for optical testing, and aerospace & defense. But at the same time, the stock has This article was written by Investor Overview 3.06K Followers Follow I'm a passionate investor from the Netherlands with 12 years of stock market experience. My articles usually contain a good overview of important investment criteria. A stock for my portfolio is of interest to me if the company has the following characteristics:1. Companies that are growing in both revenue, earnings and free cash flow.2. Companies that have excellent growth prospects.3. Stocks with favorable valuations.I prefer steadily growing companies with high free cash flow margins, dividend stocks and stocks with generous share repurchase programs.Disclaimer: My articles do not provide financial advice, they reflect my own findings and insights. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in VIAV over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.