Viavi Solutions (VIAV) Could Be 36% Undervalued As Fresh Guidance Lifts Attention

Why Viavi Solutions Stock Is Back In Focus After Fresh Guidance

Viavi Solutions (VIAV) is drawing renewed attention after reporting fourth quarter and full year 2026 results, alongside earnings guidance for the first quarter of fiscal 2027 that points to higher expected revenue.

The company reported fourth quarter sales of US$443.1 million and net income of US$32.7 million, and guided first quarter fiscal 2027 net revenue to a range of US$450 million to US$460 million. Management also pointed to demand from data center and aerospace and defense customers and highlighted the integration of Spirent as a contributor to expected momentum.

See our latest analysis for Viavi Solutions.

The Viavi Solutions share price has pulled back 3.6% in the last day and 8.7% over the past month, yet it is still up 115.7% year to date, with a very large 1 year total shareholder return of 258.1%. This indicates strong positive momentum despite recent volatility.

If Viavi Solutions’ recent move has you looking at test, networking, and data infrastructure trends, this can be a useful moment to broaden your research with 56 AI infrastructure stocks

Bulls argue Viavi Solutions’ data center exposure and Spirent integration justify the sharp rerating. Bears point to the recent pullback and full year loss. Do the current numbers support the optimism or hint at overreach on valuation?

Most Popular Viavi Solutions Narrative: 36.3% Undervalued

Against the last close of $39.14, the most widely followed narrative pegs Viavi Solutions at a fair value of $61.43, using an 8.9% discount rate and a long term earnings build that many investors are now scrutinising closely.

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 is expected to drive structural revenue growth through 2026 and beyond. The rapid proliferation of fiber broadband deployments for both hyperscale data interconnect and traditional carrier networks, coupled with aggressive announced spending by North American fiber operators, points to a significant near-term acceleration in fiber-related test equipment orders supporting higher future revenues.

Read the complete narrative.

Want to see what sits behind that growth story for Viavi Solutions? The narrative leans on ambitious revenue compounding, a sharp turn in margins, and a richer future earnings multiple. Curious how those ingredients combine to justify a fair value far above today’s price.

Result: Fair Value of $61.43 (UNDERVALUED)

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

However, Viavi Solutions still carries clear risks if wireless infrastructure spending stays weak or if recent acquisitions and new debt do not integrate smoothly.

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

Another View On Viavi Solutions Valuation

The analyst narrative presents Viavi Solutions as 36.3% undervalued, using earnings forecasts and a future P/E of 46.3x to support a fair value of $61.43. Our DCF model offers a different view. It values future cash flows at $28.47 per share, which makes the current $39.14 price appear expensive rather than cheap.

The difference between an earnings-based target and a cash flow-based estimate raises a straightforward question for investors: which set of assumptions seems closer to how Viavi Solutions might convert its revenue into cash.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Viavi Solutions for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 52 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With mixed views on Viavi Solutions running through this article, it makes sense to review the key numbers, weigh both risks and rewards, and see how the balance looks for you with 2 key rewards and 1 important warning sign

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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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