Is Viavi Solutions Stock a Buy or Sell After CEO Insider Selling?

The recent insider selling activity by Viavi Solutions (NASDAQ: VIAV) CEO Oleg Khaykin has sparked debate among investors about the stock's future trajectory. Against the backdrop of the company's strong 2025 financial performance and a sharply elevated valuation, the question remains: does the CEO's selling signal caution, or is it a routine portfolio adjustment?

CEO's Insider Transactions: A Closer Look

In December 2025, Khaykin executed multiple open-market sales of Viavi shares, totaling approximately 154,646 shares on December 2 alone, valued at $2.73 million at an average price of $17.63–$17.77 per share. Additional transactions on December 3 and 5 further reduced his holdings by 3.68% of his direct ownership, valued at $704,165. These sales represent a significant portion of his stake-approximately 4.07%-though he still retains 1,921,191 shares, valued at roughly $33.6 million post-transaction.

Such activity, while notable, does not necessarily indicate bearish sentiment. Insiders often sell shares to diversify personal portfolios or meet liquidity needs, particularly after periods of strong stock performance. Viavi's shares had approached a 52-week high of $18.55 in late December 2025, driven by robust demand in data centers, aerospace, and defense. Khaykin's transactions may reflect a strategic rebalancing rather than a lack of confidence in the business.

Strong Financial Performance in 2025

Viavi's fiscal 2025 results underscore its operational strength. For the fourth quarter, the company reported net revenue of $290.5 million, a 15.3% year-over-year increase, with non-GAAP operating margins expanding by 350 basis points to 14.4%. Full-year revenue reached $1.08 billion, up 8.4% YoY, supported by non-GAAP diluted EPS of $0.47 for the year. These figures highlight Viavi's ability to capitalize on growth in optical networking and test-and-measurement markets.

However, profitability remains a mixed picture. GAAP diluted EPS for the quarter was a modest $0.04, reflecting ongoing non-cash expenses such as amortization. While non-GAAP metrics paint a rosier picture, investors must scrutinize the sustainability of these adjustments.

Valuation Dynamics: Expensive or Justified?

Viavi's valuation has surged in late 2025. As of November 28, 2025, the stock traded at a trailing P/E ratio of 256.29, based on a current EPS of $0.07 and a share price of $17.94. This represents a dramatic jump from a P/E of 52.84 in August 2025 as reported in Q4 results. By comparison, the company's industry peers had a median P/E of 60.1x as of September 2025, with the global communications sector averaging 34.4x according to public data. Viavi's P/E of 74.87 as of September 2025 already exceeded these benchmarks, and the November reading suggests further divergence as noted in industry reports.

This valuation disconnect raises questions. While Viavi's revenue growth and margin expansion are commendable, a P/E of 256x implies investors are paying a premium for future earnings potential rather than current profitability. For context, the company's 3-year average P/E is 101.45 according to market analysis, meaning the current multiple is more than double historical norms. Such extremes often reflect speculative fervor rather than fundamental strength.

Insider Selling vs. Market Fundamentals

The CEO's selling activity must be contextualized within these valuation dynamics. On one hand, Khaykin's transactions occurred as Viavi's stock approached multi-year highs, suggesting he may be locking in gains after a strong rally. On the other hand, the elevated P/E ratio indicates the stock may be overextended relative to earnings power.

Analysts remain divided. Some argue that Viavi's leadership in high-growth sectors like AI-driven data centers and 5G infrastructure justifies a premium valuation. Others caution that the stock's multiples are unsustainable without a material increase in earnings. The CEO's selling, while not inherently bearish, could be interpreted as a signal to exercise caution in a market where sentiment may be outpacing fundamentals.

Conclusion: Buy, Sell, or Hold?

Viavi Solutions' 2025 performance demonstrates its resilience and relevance in a rapidly evolving tech landscape. However, the stock's valuation has become increasingly detached from its earnings base. For investors considering entry, the CEO's insider selling-while not a red flag-serves as a reminder to prioritize fundamentals over momentum.

A cautious approach is warranted. Those already invested may choose to hold, given the company's strong revenue growth and strategic positioning. However, new buyers should wait for a pullback or clearer signs of earnings acceleration before committing capital. In a market where valuation discipline is often tested, Viavi's current price may reflect optimism that not all investors are prepared to justify.