VIAV
Viavi Solutions Inc.
$49.51
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 380.1% above fair value
You pay
$49.51
Bear
$8.25
Fair
$10.31
Bull
$12.38
Bear
$8.25
-83.3%
$0.20 × 12x P/E
Fair
$10.31
-79.2%
$0.20 × 15x P/E
Bull
$12.38
-75.0%
$0.20 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
247.6x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $32.25 from 19 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $10.31 per share.
Warnings
The company's reported profits differ from official accounting profits by 33%. Check what costs are being left out of the adjusted number.
Wall Street's average price target is $32.25 (from 19 analysts). Our estimate is 91% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples