Head-To-Head Review: Viavi Solutions (NASDAQ:VIAV) vs. Peraso (NASDAQ:PRSO)

Peraso (NASDAQ:PRSO) and Viavi Solutions (NASDAQ:VIAV) are both small-cap business services companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, institutional ownership, analyst recommendations, risk and profitability.

Analyst Recommendations

This is a summary of current ratings and target prices for Peraso and Viavi Solutions, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Peraso	0	0	2	0	3.00
Viavi Solutions	0	4	2	1	2.57

Peraso currently has a consensus target price of $21.88, suggesting a potential upside of 1,462.50%. Viavi Solutions has a consensus target price of $11.65, suggesting a potential upside of 69.58%. Given Peraso’s stronger consensus rating and higher possible upside, equities analysts clearly believe Peraso is more favorable than Viavi Solutions.

Volatility and Risk

Peraso has a beta of 1.76, suggesting that its share price is 76% more volatile than the S&P 500. Comparatively, Viavi Solutions has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500.

Earnings and Valuation

This table compares Peraso and Viavi Solutions’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Peraso	$13.75 million	0.27	-$16.80 million	($21.15)	-0.07
Viavi Solutions	$1.01 billion	1.52	$25.50 million	($0.02)	-343.50

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Peraso	-135.95%	-201.79%	-118.81%
Viavi Solutions	-0.42%	4.65%	1.80%

Institutional & Insider Ownership

77.6% of Peraso shares are held by institutional investors. Comparatively, 95.5% of Viavi Solutions shares are held by institutional investors. 5.3% of Peraso shares are held by insiders. Comparatively, 1.8% of Viavi Solutions shares are held 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.

Summary

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

About Peraso

Peraso Inc., a fabless semiconductor company, develops, markets, and sells semiconductor devices and modules. The company's products include millimeter wavelength (mmWave) ICs, including baseband IC, various mmWave radio frequency, integrated circuits, as well as associated antenna technology; and mmWave antenna modules. It also provides accelerator engine products, comprising bandwidth engine for high-performance applications where throughput is critical; and quad partition rate, which allows for parallel accesses to multiple partitions of the memory simultaneously. Its mmWave products are used for various applications, such as multi-gigabit point-to-point (PtMP) wireless links; and fixed wireless access in the 5G operating bands, as well as consumer applications, such as wireless video streaming, and untethered augmented reality and virtual reality. The company also licenses intellectual property, as well as offers non-recurring engineering services. It markets its products through direct sales personnel, as well as sells representatives and distributors. The company was formerly knowns as MoSys, Inc. and changed its name to Peraso Inc. in December 2021. Peraso Inc. was incorporated in 1991 and is based in San Jose, California.

About Viavi Solutions

Viavi Solutions Inc. provides network test, monitoring, and assurance solutions for communications service providers, hyperscalers, network equipment manufacturers, original equipment manufacturers, government, and avionics customers in the Americas, the Asia-Pacific, Europe, the Middle East, and Africa. The company operates through three segments: Network Enablement (NE), Service Enablement (SE), and Optical Security and Performance Products (OSP). The NE segment offers testing solutions that access the network to perform build-out and maintenance tasks. Its solutions include instruments, software, and services to design, build, activate, certify, troubleshoot, and optimize networks; and test and measurement instrumentation for communication and safety. It also offers support and professional services, such as repair, calibration, software support, and technical assistance for the products; and system integration projects, including project management, installation, and implementation, as well as product and technology training, and consulting services. The SE segment provides embedded systems and enterprise performance management solutions for communication service providers, enterprises, and cloud operators with visibility into network, service, and application data. Its solutions include instruments, microprobes, and software, which monitor, collect, and analyze network data to reveal the actual customer experience and to identify opportunities for new revenue streams and network optimization. The OSP segment offers optical products for anti-counterfeiting, consumer and industrial, government, automotive, and industrial markets. The company was formerly known as JDS Uniphase Corporation. Viavi Solutions Inc. was founded in 1923 and is headquartered in Chandler, Arizona.