Viavi Solutions Inc. VIAV recently expanded its production capacity in the United States by opening a new production facility in Chandler, AZ. In addition to generating jobs to boost regional economic development, the investment is likely to help meet the increasing demand for high-speed connectivity via large-scale production of low-cost optical fibers.
The facility will feature state-of-the-art optical coating capabilities with sophisticated equipment and is likely to provide the ideal conditions for long-term, sustainable growth with a business-friendly environment and a strong talent pool. The facility is expected to further complement the strategic plan of the company to relocate its headquarters to Chandler from California and leverage the city’s high quality of life at a reasonable cost.
Viavi engages in targeted restructuring activities to consolidate its operations and align businesses with evolving market conditions and investment strategies. The company pursues a holistic growth model with strategic acquisitions and focused organic improvement plans. Of late, the OSP (Optical Security and Performance Products) segment has been benefiting from strong demand for 3D sensing and anti-counterfeiting products. 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.
Viavi boasts a comprehensive product portfolio that offers end-to-end network visibility and analytics that help build, test, certify, maintain and optimize complex physical and virtual networks. The company’s wireless and fiber test solutions are in the early stages of a multi-year investment cycle, fueled by the transition of OEMs and service providers to superfast 5G networks. The healthy growth traction is further demonstrated by the upside in wireless & fiber test, 3D sensing products, optical transport, Ethernet, broadband access, video test and storage network testing markets.
The 5G transition is expected to be disruptive in nature, potentially creating new avenues for industries across the board. 5G is likely to augment the telecommunications industry's scalability, security and universal mobility, thus propelling the proliferation of IoT. Telecom firms are enabling customers to move away from an economy-of-scale network operating model to demand-driven operations. They are ensuring seamless migration 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’s solutions are well-positioned to meet these rapidly changing industry trends, given its technology prowess, product depth and wide customer base.
Demand for sophisticated anti-counterfeiting features, which consumers can easily validate without using special tools but are difficult to create or simulate using conventional printing technology, has led to the exponential growth of Viavi’s OSP segment. The custom optics products of the company offer an array of advanced technologies and precision optics to meet customers' specific requirements. Its 3D sensing optical filters and Engineered Diffusers are deployed in smartphones for facial recognition biometric authentication. In addition, optical filters and sensors deployed in autonomous vehicles and IoT devices offer lucrative opportunities for the company.
The stock has lost 30.1% in the past year compared with the industry’s decline of 13.5%.
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Viavi currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
TESSCO Technologies Incorporated TESS, sporting a Zacks Rank #1, delivered an earnings surprise of 126.1%, on average, in the trailing four quarters. Earnings estimates for TESSCO for the current year have moved up 44.3% since November 2021.
TESSCO offers products to the industry’s top manufacturers in mobile communications, Wi-Fi, wireless backhaul and related products. With more than three decades of experience, it delivers complete end-to-end solutions to the wireless industry.
Harmonic Inc. HLIT, carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 79.3%, on average, in the trailing four quarters. Earnings estimates for Harmonic for the current year have moved up 48.6% since March 2021.
Harmonic provides video delivery software, products, system solutions, and services worldwide. With more than three decades of experience, it has revolutionized cable access networking via the industry's first virtualized cable access solution, enabling cable operators to more flexibly deploy gigabit internet service to consumers' homes and mobile devices.
AudioCodes Ltd. AUDC, sporting a Zacks Rank #1, is likely to benefit from the secular tailwinds related to IP-based communications. Incorporated in 1992 and headquartered in Lod, Israel, it offers advanced communications software, products and productivity solutions for the digital workplace. It has a long-term earnings growth expectation of 9%.
AudioCodes It aims to leverage its long-term partnership with Microsoft to further strengthen its market position. It is also likely to benefit from its continued focus on high-margin businesses.
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