Head to Head Review: Inphi (IPHI) & Viavi Solutions (VIAV)

Inphi (NYSE:IPHI) and Viavi Solutions (NASDAQ:VIAV) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.

Profitability

This table compares Inphi and Viavi Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Inphi -25.21% -5.28% -2.30%
Viavi Solutions -5.92% 12.72% 4.75%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Inphi and Viavi Solutions, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Inphi 2 3 7 0 2.42
Viavi Solutions 1 1 7 0 2.67

Inphi currently has a consensus target price of $36.79, indicating a potential upside of 7.01%. Viavi Solutions has a consensus target price of $11.62, indicating a potential upside of 9.99%. Given Viavi Solutions’ stronger consensus rating and higher possible upside, analysts clearly believe Viavi Solutions is more favorable than Inphi.

Volatility & Risk

Inphi has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500. Comparatively, Viavi Solutions has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500.

Earnings and Valuation

This table compares Inphi and Viavi Solutions’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Inphi $348.20 million 4.36 -$74.90 million $0.58 59.28
Viavi Solutions $880.40 million 2.74 -$46.00 million $0.34 31.06

Viavi Solutions has higher revenue and earnings than Inphi. Viavi Solutions is trading at a lower price-to-earnings ratio than Inphi, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

89.8% of Viavi Solutions shares are owned by institutional investors. 3.4% of Inphi shares are owned by insiders. Comparatively, 0.5% of Viavi Solutions shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Viavi Solutions beats Inphi on 8 of the 13 factors compared between the two stocks.

About Inphi

Inphi Corporation provides high-speed analog and mixed signal semiconductor solutions for the communications, datacenter, and computing markets worldwide. The company's analog and mixed signal semiconductor solutions offers high signal integrity at data speeds while reducing system power consumption. Its semiconductor solutions are designed to address bandwidth bottlenecks in networks, maximize throughput and minimize latency in computing environments, and enable the rollout of next generation communications and datacenter infrastructures. Its solutions provide a high-speed interface between analog signals and digital information in high-performance systems, such as telecommunications transport systems, enterprise networking equipment, datacenters and enterprise servers, storage platforms, test and measurement systems, and military systems. The company also provides 25G to 600G high-speed analog semiconductor solutions for the communications market. Its products perform a range of functions, such as amplifying, encoding, multiplexing, demultiplexing, retiming signals at speeds up to 400 Gbps. Inphi Corporation sells its products directly through its sales force, as well as through a network of sales representatives and distributors to original equipment manufacturers. The company was formerly known as TCom Communications, Inc. and changed its name to Inphi Corporation in February 2001. Inphi Corporation was incorporated in 2000 and is headquartered in Santa Clara, California.

About Viavi Solutions

Viavi Solutions Inc. provides network test, monitoring, and assurance solutions to communications service providers, enterprises, network equipment manufacturers, civil government, military, and avionics customers worldwide. The company operates through Network Enablement, Service Enablement, and Optical Security and Performance Products segments. The Network Enablement segment offers testing solutions that access the network to perform build-out and maintenance tasks. This segment provides solutions that include instruments, software, and services to design, build, activate, certify, troubleshoot, and optimize networks. It also offers support and professional services, such as repair, calibration, software support, and technical assistance for the products; and system integration projects, including project management, installation, and implementation, as well as product and technology training, and consulting services. The Service Enablement segment provides embedded systems and enterprise performance management solutions for communication service providers, enterprises, and cloud operators with visibility into network, service, and application data. Its solutions include instruments, microprobes, and software, which monitor, collect, and analyze network data to reveal the actual customer experience and to identify opportunities for new revenue streams and network optimization. The Optical Security and Performance Products segment offers optical products for anti-counterfeiting, government, industrial, automotive, and consumer electronic markets, including 3D sensing applications. The company was formerly known as JDS Uniphase Corporation and changed its name to Viavi Solutions Inc. in August 2015. Viavi Solutions Inc. was founded in 1979 and is headquartered in San Jose, California.

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