Meta Marshall, an analyst from Morgan Stanley, maintained the Sell rating on Viavi Solutions (VIAV – Research Report). The associated price target was lowered to $10.00.
Meta Marshall has given his Sell rating due to a combination of factors impacting Viavi Solutions. One of the primary concerns is the company’s ongoing struggle to achieve meaningful scale in the test and measurement sector, which has been compounded by the competitive nature of asset acquisition in this field. Despite Viavi’s recent success in acquiring Spirent’s High-Speed Ethernet and Network Security business, the size of the acquired business is smaller than anticipated, raising questions about its potential impact on Viavi’s revenue trajectory.
Additionally, while the acquisition is seen as a positive step, there is a need for more clarity regarding the revenue outlook of the newly acquired business. The business had previously experienced declining revenue, and Viavi’s projected revenue from this asset in the first year post-closing is lower than expected. As such, the uncertainty surrounding the future revenue performance of this acquisition contributes to the cautious outlook and the Sell rating.
Marshall covers the Technology sector, focusing on stocks such as Arista Networks, Cisco Systems, and Coherent Corp. According to TipRanks, Marshall has an average return of 5.4% and a 54.25% success rate on recommended stocks.