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

Analyst Recommendations

This is a summary of current ratings and price targets for Viavi Solutions and Sonus Networks, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Viavi Solutions 0 2 6 0 2.75
Sonus Networks 1 1 5 0 2.57

Viavi Solutions presently has a consensus price target of $12.78, indicating a potential upside of 37.31%. Sonus Networks has a consensus price target of $8.71, indicating a potential upside of 21.12%. Given Viavi Solutions’ stronger consensus rating and higher probable upside, research analysts clearly believe Viavi Solutions is more favorable than Sonus Networks.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Viavi Solutions $811.40 million 2.61 $94.40 million $0.71 13.11
Sonus Networks $241.68 million 1.48 -$12.30 million ($0.60) -11.98

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

Insider and Institutional Ownership

92.4% of Viavi Solutions shares are owned by institutional investors. Comparatively, 68.6% of Sonus Networks shares are owned by institutional investors. 0.6% of Viavi Solutions shares are owned by insiders. Comparatively, 7.7% of Sonus Networks shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Viavi Solutions 20.57% 8.46% 3.31%
Sonus Networks -12.15% -6.18% -4.38%

Volatility & Risk

Viavi Solutions has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500. Comparatively, Sonus Networks has a beta of 2.09, meaning that its stock price is 109% more volatile than the S&P 500.

Summary

Viavi Solutions beats Sonus Networks on 11 of the 13 factors compared between the two stocks.

About Viavi Solutions

Viavi Solutions Inc. (Viavi) is a provider of network test, monitoring and assurance solutions to communications service providers, enterprises and their ecosystems. The Company also offers thin film optical coatings, providing light management solutions to anti-counterfeiting, consumer and industrial, government and healthcare and other markets. The Company’s segments include Network Enablement (NE), Service Enablement (SE), and Optical Security and Performance Products (OSP). The NE segment provides testing solutions that access the network to perform build-out and maintenance tasks. The SE segment offers solutions, which are embedded systems that yield network, service and application performance data. The OSP segment provides optical security solutions. The OSP segment’s security offerings for the currency market include Optically Variable Pigment (OVP), Optically Variable Magnetic Pigment (OVMP) and banknote thread substrates.

About Sonus Networks

Sonus Networks, Inc. (Sonus) is a provider of networked solutions for communications service providers and enterprises to help them secure and unify their real-time communications infrastructures. The Company helps communications service providers and enterprises hold the session initiation protocol (SIP) and fourth generation (4G)/long term evolution (LTE)-based solutions, including voice over Internet protocol (VoIP), voice over wireless fidelity (VoWiFi), video and unified communications (UC) by securing and enabling Internet Protocol (IP) networks. Its products include session border controllers (SBCs), diameter signaling controllers (DSCs) and VoWiFi solutions. Sonus Products include Sonus GSX9000 Open Services Switch, Sonus T7000 Intelligent Switching System, Sonus Diameter Signaling Controllers, Sonus Signal Transfer Points, Sonus PSX Policy & Routing Server, Sonus WebRTC Services Solution, Sonus Network Management Solutions and Virtualized Mobile Core (VMC) Solution.

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