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Investing.com - Rosenblatt Securities raised its price target on Viavi Solutions (NASDAQ:VIAV) to $15.00 from $13.50 on Friday, maintaining a Buy rating following the company’s strong quarterly results and guidance. Currently trading at $10.16, the stock shows a potential 18% upside to analyst consensus targets, according to InvestingPro data, though it’s trading at a relatively high P/E ratio of 442x.
The optical testing equipment provider reported fourth-quarter revenues of $290 million, representing a 15% year-over-year increase, with earnings per share of $0.13. Both figures exceeded Rosenblatt’s estimates, with revenue beating by 2% and EPS exceeding projections by $0.02. The company maintains a healthy financial position with a current ratio of 1.53 and generates positive free cash flow, yielding 3% based on the latest twelve months’ results.
Viavi’s first-quarter revenue guidance of $294 million at the midpoint particularly impressed analysts, coming in 6% higher than Rosenblatt’s previous estimate. The strong outlook stems from better-than-seasonal growth in the Network and Service Enablement (NSE) segment, led by Lab and Production optical test equipment for AI data centers and Aerospace & Defense applications.
Despite softness in Field Test Instrument demand, especially in wireless markets, the company’s Lab and Production business now contributes approximately 30% of NSE revenue, while Aerospace & Defense accounts for about 20%. This composition provides enough strength for the NSE segment to grow in the first quarter of fiscal 2026 despite typically negative seasonality.
Rosenblatt cited Viavi’s revenue recovery in the second half of fiscal 2025, which drove total revenue growth for the year to 8%, and views the upcoming close of the Spirent (LON:SPT) HSE acquisition as a further catalyst for the stock. The new $15 price target represents a multiple of 25 times Rosenblatt’s fiscal 2027 earnings forecast.
In other recent news, Viavi Solutions Inc. reported its fourth-quarter earnings for fiscal year 2025, surpassing analyst expectations. The company achieved an earnings per share (EPS) of $0.13, slightly higher than the forecasted $0.12. Additionally, Viavi Solutions exceeded revenue projections, reporting $290.5 million compared to the anticipated $285.18 million. These developments highlight the company’s financial performance in the latest quarter. While the earnings call did not mention any mergers or acquisitions, the positive results could influence investor sentiment. Analysts had projected slightly lower figures, indicating Viavi Solutions’ ability to outperform expectations. No recent analyst upgrades or downgrades were reported in connection with the company’s performance. These recent developments provide insights into Viavi Solutions’ current financial standing.
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