Shares of Viavi Solutions Inc. VIAV have gained 42.9% in the past six months compared with the industry’s growth of 21.4%. Healthy demand trends in various end markets and a flexible business model propelled the growth. Earnings estimate for VIAV has improved to 38 cents per share from 36 cents per share for 2025 over the past 90 days The projections imply robust growth potential. Backed by strong fundamentals, this Zacks Rank #3 (Hold) stock appears primed for further appreciation.

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VIAV’s Growth Drivers

Headquartered in Scottsdale, AZ, Viavi Solutions Inc. is a leading provider of network test, monitoring and service enablement solutions to diverse sectors across the globe. Strong demand for sophisticated anti-counterfeiting features that can be validated without the use of special tools but are difficult to create or simulate using conventional printing technology is driving exponential growth in Viavi’s OSP segment. Gradual demand recovery of lab and production test equipment from wireless and fiber NEMs and semiconductor companies is a positive factor.

The company expects to leverage major secular growth trends in 5G wireless, fiber and 3D sensing to achieve higher revenues and profitability with greater flexibility in the capital structure. 5G is likely to augment the scalability, security and universal mobility of the telecommunications industry, which is expected to propel the proliferation of IoT. Telecom firms are helping their customers to move away from an economy-of-scale network operating model to demand-driven operations and to seamlessly migrate to 5G by offering easy programmability and flexible automation. The convergence of network technologies requires significant investments from both traditional carriers (telecom and cable) and cloud service providers. Viavi is well-positioned to meet these rapidly changing industry trends, given its technology prowess, product depth and wide customer base.

Viavi has recently inked a definitive agreement to acquire Inertial Labs, Inc. for $150 million to extend its footprint in multiple end markets. The Inertial Labs specializes in developing advanced orientation, positioning and navigation solutions dedicated to defense, aerospace and industrial use cases. Integration of such capabilities will allow Viavi to gain a strong foothold in the market of autonomous air, land and sea systems within the military and industrial sectors.

The company delivered an earnings surprise of 9.38%, on average, in the trailing four quarters. VIAV has an average brokerage recommendation (ABR) of 2.33 on a scale of 1 to 5 (Strong Buy to Strong Sell). ABR is the calculated average of actual recommendations made by brokerage firms and portends the future potential of the stock.

Key Picks

Keysight Technologies, Inc. KEYS sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the last reported quarter, it delivered an earnings surprise of 5.10%. Keysight is expected to benefit from the growing proliferation of electronic content in vehicles, momentum in space and satellite applications and rising adoption of driver-assistance systems globally.

InterDigital IDCC sports a Zacks Rank #1 at present. In the last reported quarter, it delivered an earnings surprise of 114.47%.

It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions used in digital cellular, wireless 3G, 4G and IEEE 802-related products and networks.

Ubiquiti Inc. UI sports a Zacks Rank #1 at present. In the last reported quarter, Ubiquiti delivered an earnings surprise of 20.9%. Its highly flexible global business model remains apt to adapt to the changing market dynamics to overcome challenges while maximizing growth.

The company’s effective management of its strong global network of more than 100 distributors and master resellers improved its visibility for future demand and inventory management techniques.

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