Viavi Solutions ( VIAV) is a global leader in test and measurement and optical technologies. Their test, monitoring, assurance, and resilient position, navigation and timing solutions enable and secure critical infrastructure ranging from data center ecosystems and communication networks to military, aerospace, railway and first responder communications.
In addition, they develop and advance technologies used in high-volume optical applications across anti-counterfeiting, consumer electronics, aerospace, industrial and automotive end markets.
Here's what I wrote when I made my first buy of VIAV shares in the TAZR Trader portfolio on April 7 at $38...
This $8 billion global leader in test, measurement, and optical assurance is in a strong uptrend (since their Dec quarter earnings reported in late Jan) because their technology secures and validates the infrastructure of the datacenter ecosystem and more.
It was a Zacks #1 Rank in Feb-Mar as estimates jumped, but has fallen out of the top tiers as that 60-day window has passed. I didn't look at the company then because there was so much more on my radar.
Because moving to higher speeds and CPO (co-packaged optics) introduces severe signal integrity issues like jitter and noise, testing isn't just a one-time hurdle. It is a massive, overlapping super-cycle that must scale directly with optical complexity to prevent big bottlenecks in data transfer.
This is why peer Aehr Test Systems ( AEHR) launched 40% in two days recently. I did look at AEHR last month, but it has both negative sales and earnings growth, so I passed.
VIAV sales estimates are projected to grow 35% this fiscal year (ends June) to $1.46 billion. And EPS of $0.80 are growing 70%.
(end of TAZR Buy Alert notes 4/7)
Last week, I chose VIAV for the Zacks Top Stock Picks Video which has a lot of good info in it, including snapshots of Wall Street analyst price targets before-and-after earnings. Spoiler: they were way behind on this growth story and so investors who saw the Zacks #1 Rank in Q1 were early and have been well-rewarded.
Speaking of earnings, here are some Zacks Research System notes on their recent report card April 29 which popped the stock up to new highs around $60...
Viavi delivered strong Q3 fiscal 2026 results, with both top and bottom lines surpassing the Zacks Consensus Estimates.
The company posted a solid 42.8% year-over-year increase in revenues, supported by strong demand from data centers, continued 5G and fiber network upgrades, steady aerospace and defense demand, and contributions from the Spirent product line buyout.
Net income on a GAAP basis was $6.4 million or 3 cents per share compared with $19.5 million or 9 cents per share in the prior-year quarter. Despite top-line growth, higher operating expenses and taxes impacted the bottom line.
Non-GAAP net income in the reported quarter was $67.6 million or 27 cents per share compared with $33.9 million or 15 cents per share in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate by 3 cents.
Revenue Landscape
Net sales increased to $406.8 million from $284.8 million in the year-ago quarter, primarily driven by strong performance in its Network and Service Enablement (NSE) and Optical Security and Performance Products (OSP) segments. The top line beat the consensus estimate of $393.5 million.
In the third quarter of fiscal 2026, the NSE segment generated $321.5 million in revenues, up 54.4% year over year. The segment accounted for 79% of total revenues. Acquisition of Spirent product lines and strong demand across lab, production and field products, mainly from the data center ecosystem and aerospace & defense sectors, drove solid sales growth in this segment.
The OSP segment revenues were $85.3 million, up 11.4% year over year, driven by strong demand for 3D Sensing and anti-counterfeiting.
Net sales from the Americas totaled $182.8 million, up from $108.1 million in the year-ago quarter. Revenues from Asia-Pacific were $128.2 million, up 27.3% year over year. Revenues from Europe, Middle East, and Africa increased to $95.8 million from the prior-year quarter’s tally of $76 million.
Institutional Buyers Pour In
As the final tallies filtered into the SEC 13F Q1 filings on Monday, we saw an impressive demand for VIAV shares.
Active Positions Holders Shares
Increased Positions 280 82,807,103
Decreased Positions 198 46,691,368
Held Positions 54 132,246,097
Bottom line: I am a buyer of VIAV now near $50 and on a potential gap fill to $45-46.
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Viavi Solutions Inc. (VIAV): Free Stock Analysis Report
Aehr Test Systems (AEHR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).