Is Viavi Solutions, Inc. overvalued or undervalued?

As of 21 May 2025, Viavi Solutions, Inc. has moved from an attractive to a fair valuation grade. The company is currently fairly valued, with a P/E ratio of 132, an EV to EBITDA of 22.50, and a PEG ratio of 0.23. In comparison, Credo Technology Group Holding Ltd. has a significantly higher P/E ratio of 255.22, while Box, Inc. is rated attractive with a much lower P/E of 22.48, indicating that Viavi Solutions is positioned in a unique valuation space relative to its peers.
Despite its fair valuation, Viavi's return metrics are concerning, with a ROCE of 4.68% and ROE of 2.19%, suggesting inefficiencies in generating returns on capital and equity. The stock has shown a strong performance over the past year with a return of 29.30%, outperforming the S&P 500's 10.26% return, although its longer-term performance remains weak compared to the index. Overall, while the current valuation is fair, the high P/E and low return ratios indicate potential challenges ahead.