Head to Head Contrast: Acacia Communications (ACIA) vs. Viavi Solutions (VIAV)

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

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Acacia Communications $478.41 million 3.18 $131.57 million $2.96 13.07
Viavi Solutions $811.40 million 2.63 $166.90 million $0.36 26.03

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

Volatility and Risk

Acacia Communications has a beta of 2.85, meaning that its stock price is 185% more volatile than the S&P 500. Comparatively, Viavi Solutions has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500.

Institutional and Insider Ownership

91.5% of Acacia Communications shares are owned by institutional investors. Comparatively, 92.5% of Viavi Solutions shares are owned by institutional investors. 37.1% of Acacia Communications shares are owned by insiders. Comparatively, 0.6% of Viavi Solutions shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Acacia Communications and Viavi Solutions, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acacia Communications 0 1 9 0 2.90
Viavi Solutions 0 2 6 0 2.75

Acacia Communications presently has a consensus price target of $50.50, indicating a potential upside of 30.56%. Viavi Solutions has a consensus price target of $12.78, indicating a potential upside of 36.43%. Given Viavi Solutions’ higher probable upside, analysts plainly believe Viavi Solutions is more favorable than Acacia Communications.

Profitability

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

Net Margins Return on Equity Return on Assets
Acacia Communications 27.98% 25.29% 21.83%
Viavi Solutions 10.57% 8.99% 3.44%

Summary

Acacia Communications beats Viavi Solutions on 9 of the 14 factors compared between the two stocks.

About Acacia Communications

Acacia Communications, Inc. provides high-speed coherent interconnect products. The Company’s products include a series of low-power coherent digital signal processor application-specific integrated circuits (DSP ASICs), and silicon photonic integrated circuits (silicon PICs), which it has integrated into families of optical interconnect modules with transmission speeds ranging from 100 to 400 gigabits per second (Gbps) for use in long-haul, metro and inter-data center markets. The Company is also developing optical interconnect modules that will enable transmission speeds of one terabit (1,000 gigabits) per second and above. The Company’s modules perform a majority of the digital signal processing and optical functions in optical interconnects. The Company’s coherent DSP ASICs are manufactured using complementary metal oxide semiconductor (CMOS), and its silicon PICs are manufactured using a CMOS-compatible process.

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.

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