This tech stock’s relative strength was just upgraded by IBD. The company beat analysts’ EPS estimates by $0.04 in its latest quarter.
Viavi Solutions (VIAV)
From Technology & Opportunity
Viavi Solutions (VIAV) has been delivering 3D depth-sensing filters since the technology’s beginnings in the Microsoft Xbox Kinect. Through multiple generations of increasing performance and decreasing cost, Viavi has remained the industry’s leading supplier of filters for depth-sensing systems in consumer electronics.
Viavi utilizes its proprietary low angle shift (LAS) technology to isolate wavelength bands and
improve the signal-to-noise ratio for its customer’s systems. In simpler terms, its product can filter out interference that’s messing with the intended reading.
William Blair analyst Dmitry Netis thinks Viavi’s filters represent a half-billion-dollar opportunity for Viavi. That would be a nice boost for the $2.4 billion company. In August, research from B. Riley & Co. falsely suggested that Viavi was “losing its foothold” as
an Apple supplier and noted that it would only be providing one filter in the iPhone 8 compared
to two in the iPhone 7. This sent the stock down ~6.2%, from which it has yet to recover.
Yet this week we have effectively confirmed that the iPhone X uses three of Viavi’s filters, one more than the iPhone 7. Granted, the iPhone 8 and iPhone 8 Plus don’t apply here because they don’t use the same sensors, but this is a shortsighted concern. It would not be a surprise at all to see Apple implement 3D sensing in its base models in 2019, as AR is the obvious path forward for Apple now.
We continue rate Viavi a “Buy” under $12.50.
Jason Stutman, Technology & Opportunity, www.angelpub.com, 877-303-4529, September 2017