Comparing Valuation And Performance: Viavi Solutions Inc. (VIAV), CONSOL Energy Inc. (CEIX)

The shares of Viavi Solutions Inc. have increased by more than 14.87% this year alone. The shares recently went down by -3.00% or -$0.31 and now trades at $10.04. The shares of CONSOL Energy Inc. (NYSE:CEIX), has slumped by -22.63% year to date as of 04/16/2018. The shares currently trade at $30.57 and have been able to report a change of 2.79% over the past one week.

The stock of Viavi Solutions Inc. and CONSOL Energy Inc. were two of the most active stocks on Monday. Investors seem to be very interested in what happens to the stocks of these two companies but do investors favor one over the other? We will analyze the growth, profitability, risk, valuation, and insider trends of both companies and see which one investors prefer.

Profitability and Returns

Growth alone cannot be used to see if the company will be valuable. Shareholders will be the losers if a company invest in ventures that aren’t profitable enough to support upbeat growth. In order for us to accurately measure profitability and return, we will be using the EBITDA margin and Return on Investment (ROI), which balances the difference in capital structure. VIAV has an EBITDA margin of 18.87%, this implies that the underlying business of VIAV is more profitable. The ROI of VIAV is -0.50% while that of CEIX is 13.50%. These figures suggest that CEIX ventures generate a higher ROI than that of VIAV.

Cash Flow

The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, VIAV’s free cash flow per share is a positive 0, while that of CEIX is negative -7.82.

Liquidity and Financial Risk

The ability of a company to meet up with its short-term obligations and be able to clear its longer-term debts is measured using Liquidity and leverage ratios. The current ratio for VIAV is 2.20 and that of CEIX is 0.90. This implies that it is easier for VIAV to cover its immediate obligations over the next 12 months than CEIX. The debt ratio of VIAV is 1.10 compared to 4.35 for CEIX. CEIX can be able to settle its long-term debts and thus is a lower financial risk than VIAV.


VIAV currently trades at a forward P/E of 14.76, a P/B of 3.03, and a P/S of 2.87 while CEIX trades at a forward P/E of 7.82, a P/B of 4.19, and a P/S of 0.60. This means that looking at the earnings, book values and sales basis, VIAV is the cheaper one. It is very obvious that earnings are the most important factors to investors, thus analysts are most likely to place their bet on the P/E.

Analyst Price Targets and Opinions

The mistake some people make is that they think a cheap stock has more value to it. In order to know the value of a stock, there is need to compare its current price to its likely trading price in the future. The price of VIAV is currently at a -15.13% to its one-year price target of 11.83. Looking at its rival pricing, CEIX is at a -27.64% relative to its price target of 42.25.

When looking at the investment recommendation on say a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell), VIAV is given a 2.20 while 2.00 placed for CEIX. This means that analysts are more bullish on the outlook for VIAV stocks.

Insider Activity and Investor Sentiment

Short interest or otherwise called the percentage of a stock’s tradable shares currently being shorted is another data that investors use to get a handle on sentiment. The short ratio for VIAV is 4.73 while that of CEIX is just 3.22. This means that analysts are more bullish on the forecast for CEIX stock.


The stock of Viavi Solutions Inc. defeats that of CONSOL Energy Inc. when the two are compared, with VIAV taking 7 out of the total factors that were been considered. VIAV happens to be more profitable, generates a higher ROI, has higher cash flow per share, higher liquidity and has a lower financial risk. When looking at the stock valuation, VIAV is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for VIAV is better on when it is viewed on short interest.

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