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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Viavi Solutions Inc. (XNAS:VIAV) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
VIAV
Name:
VIAVI SOLUTIONS INC. (XNAS:VIAV)
Sector:
37.70M
Industry:
Communication Equipment
CEO:
Mr. Oleg Khaykin
Total Employees:
3,600
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -602.38% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF VIAVI SOLUTIONS INC.(VIAV) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND COMMUNICATION EQUIPMENT INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
13.62
One Month Price Target:
$13.68
Six Month Price Target :
$13.98
Likely Price in One Year's Time:
Ticker:
$14.33
Likely Trading Range Today Under (Normal Volatility)
$13.57
Price Upper limit ($) :
$13.67
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$12.99
This week:
$12.2
This month :
$10.79
Other Primary facts
Market Cap:
3.03B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
226.26M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
10.87%
-15.74%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$16.56
$15.22
$10.68
$12.02
Medium risk (<10%) entry points
Buy Call
Sell Call
$14.78
Buy Put:
Sell Put:
$14.50
$12.45
$12.74
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
VIAV
Sharpe Ratio:
0.26%
Comparison:
VIAV, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -80.03% lower than the industry
& is -88.64% lower than the market/S&P 500 average
Average Returns/Yield of
VIAV
Daily returns:
0.01%
Weekly returns:
0.07%
Monthly returns:
0.29%
Yearly returns:
12.89%
Comparison of returns:
Average annual returns/yield (last 3 years) is -72.57% below industry average
Classification:
VIAV, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.64
Statistical test of Returns:
VIAV has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.27%
Weekly Volatility:
5.07%
Monthly Volatility:
10.15%
Yearly Volatility:
35.16%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.78%
Volatility in last five trading days has been -65.83% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.65%
Weekly VaR:
-10.39%
Monthly VaR:
-20.78%
How Much Can the price of
VIAV
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-71.98%
This translates to price declining to:
$11.14
This translates to price declining to:
$3.82
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
VIAV is a 46.66% riskier investment compared to the market/S&P 500 & is 25.64% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -28.37% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
VIAV
Beta in relation to market/S&P 500--0.78
Expected beta in 1 year's time:
0.823
Expected beta in 3 year's time:
1.164
Unlevered (debt free) Beta:
0.827
Beta in relation to Nasdaq (XNAS):
0.903
Beta in relation to all global stocks::
0.795
Beta Comparison & Analysis
Beta of competitors/peers::
1.117
Beta is -30.17% lower than peers
Average Industry Beta:
1.197
Beta is -34.85% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.050
Alpha is -423.17% below industry average alpha yield
Alpha is -316% below the market average
Analysis of Cost of Capital of
VIAV
Equity cost of capital:
0.085
Equity cost of capital is -25.18% below industry mean WACC
Unlevered (without debt) cost of capital:
9.00%
Before-tax cost of debt:
3.06%
After-tax cost of debt:
2.42%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.42%
WACC is -28.25% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$5.60
Revenue growth rate per share of (3Y):
3.59
Annual revenue growth rate is 149.71% above the industry average
EPS:
-$0.02
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$0.39
-
-
Debt per share
$3.74
EBITDA per share
$0.72
Valuation Analysis Today of
VIAV
P/E Ratio:
229.52
P/E Ratio of Competitors/Peers:
850.68
P/E ratio is -73.02% lower than main peers & is 518.26% higher than the industry
-
VIAV is -1934.39% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
2.43
Price to sales ratio is 6.13% above the industry mean
P/B (Price to book value ratio):
3.59
Price to free cash flow: 34.98
-
Net income growth rate (3Y):
-199.52%
Net income growth rate is -143.76% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
98.49%
Net debt to equity ratio:
-6.94%
Debt to assets ratio:
38.98%
Net debt to assets ratio:
-2.75%
Debt-to-asset ratio is -29.56% below industry average
Ability to repay debt:
Interest coverage ratio:
6.21
Interest coverage ratio is -82.98% less than industry average
Looking forward:
Debt growth rate:
15.31%
Annual debt growth is -251% lower than industry average debt growth rate
Debt repayment rate in last quarter: 29.27%
Analysis of Key Statistics
Correlation of price movement with the market:
0.742
Statistical significance of correlation:
VIAV has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.552
Stock price is 34.41% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.552
Correlation of price movement with Nasdaq (^IXIC):
0.019
Covariance of price movement with the market:
0.026
Kurtosis
7.644
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.504
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
VIAV
Gross Profit Margin Ratio:
238%
Operating Profit Margin Ratio:
13.38%
Operating profit margin is 108.15% higher than the industry
Net Profit Margin Ratio:
238%
Effective Tax Rate:
105.75%
Effective tax rate is 279.03% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-0.34%
Return on equity (ROE) is -100.97% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-0.13%
Return on assets (ROA) is -103.06% lower than the industry
Financial Leverage:
1.6x
Current Ratio:
4.56
Current ratio is 104.76% above industry average
Cash Conversion Cycle (days):
46.3
Cash conversion cycle is -25.95% below industry average
The remaining useful life of property plant & equipment is: 11.0 years
Stock based compensation to net income ratio:
-468.97%
In-depth Efficiency Analysis
Revenue generated per employee:
352.2K
Each employee generates -36% less revenue than industry average revenue per employee
EBITDA generated per employee:
45.2K
Each employee generates -40% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 0.8K
Each employee generates -103% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
10.5K
Each employee generates -764% less free cash flow than industry average revenue per employee
Assets/Capital per employee
232.5K
Each employee generates -764% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 4.86%
Growth rate in R&D investment/expenditure is -309.84% lower than the industry
Competitors/Peer firms of
VIAV
TTEC Holdings, Inc. (XNAS:TTEC)
Sprout Social Inc (XNAS:SPT)
AVNET, INC. (XNAS:AVT)
APPFOLIO, INC. (XNAS:APPF)
FEYE
Jamf Holding Corp. (XNAS:JAMF)
Mandiant, Inc. (XNAS:MNDT)
ALARM.COM HOLDINGS, INC. (XNAS:ALRM)
TOWER SEMICONDUCTOR LTD (XNAS:TSEM)
Current Analyst Ratings
Strong buy�4%
Buy�17%
Hold�17%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
4/2/22
Revenue:
1.27B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
512.70M
755.30M
211.10M
-
359.50M
-
15.90M
586.50M
5.20M
26.20M
86.00M
162.60M
169.70M
- 2900.00K
50.40M
53.30M
- 2900.00K
Statement of Cash Flow
Date:
Period:
19.50M
Differed Income Tax :
-
Stock Based Compensation :
13.60M
Change in Working Capital :
- 12600.00K
Accounts Receivables:
10.90M
Other Working Capital:
- 3600.00K
Other Non-Cash Items:
87.70M
Net Cash Provided by Operating Activities:
53.40M
Investments in PP&E:
-
Net Acquisitions:
- 1200.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
10/2/21
2022
Q1
915.60M
1.60M
917.20M
268.40M
102.80M
44.20M
1.33B
203.10M
393.90M
78.20M
-
104.70M
57.00M
836.90M
-
2.17B
66.90M
10.40M
27.30M
67.40M
147.80M
292.50M
845.60M
132.50M
1.02B
-
1.31B
200.00K
- 69385600.00K
- 105900.0K
70.35B
October 2, 2021 at 6:00:00 AM
1.10B
858.60M
2.17B
-
856.00M
- 59600.0K
-
- 13600.00K
- 14800.00K
- 350000.00K
-
- 8800.00K
-
541.60M
182.80M
- 3100.00K
218.30M
926.70M
708.40M
53.40M
- 15700.00K
37.70M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
VIAV
2023
2024
2025
2026
2027
$14.40
$7.51
$7.91
$8.32
$8.76