Evercore ISI Initiates Vistance Networks (VISN) at In Line

Evercore ISI analyst Amit Daryanani initiates coverage on Vistance Networks (NASDAQ: VISN) with a In Line rating and a price target of $20.00.

The analyst comments "Vistance Networks (formerly CommScope) reported its first earnings as a standalone company following the divestiture of its CCS segment to Amphenol. Vistance now consists of two operating businesses: Aurora (access/network solutions for service providers) and Ruckus (enterprise Wi-Fi, switching, and cloud-managed networking). Rev/EPS for the quarter came in at $515M/$0.17 (excluding CCS)- representing +24% y/y revenue growth and core adjusted EBITDA margin expansion of ~390bps. Aurora’s strength (up +33% y/y) was driven by continued DOCSIS 4.0 momentum, including strong FDX deployments and amplifier shipments, with Tier-1 North American operator shipments starting in Q1:26 and broader unified node ramps in H1:26. Q4 EBITDA margins were ~23% (+800bps y/y), helped by elevated legacy licensing revenue that is unlikely to repeat. While 2026 revenue should grow modestly, EBITDA will decline due to mix normalization and stranded costs, with a longer-term margin target of ~20%. Ruckus is expected to sustain momentum into CY26, with mid-teens revenue growth driven by Wi-Fi 7 deployments and expanded selling resources. Q4 EBITDA margins were ~12% (down ~500bps y/y) due to sales investments and higher incentive comp. In 2026, EBITDA is expected to grow in the low-teens, with longer-term margins targeted in the low-20% range. Companywide, VISN guided 2026 adj.EBITDA to $350–400M, roughly flattish versus 2025’s $379M. This outlook incorporates approximately $30M of stranded costs and a $20M headwind from DDR4 memory pricing, though management emphasized supply remains secure and mitigation efforts include product redesign, alternative sourcing, pricing actions, and inventory buffers. VISN now holds approximately $2.6B in cash following the CCS divestiture and plans to issue a special cash dividend of at least $10/share by April 2026. Net leverage improved to approximately 4.8x (including CCS), down from 7.8x at the start of the year. Net/net: 2025 marked a breakout recovery year for VISN, driven by end-market improvement across both Aurora and Ruckus. While 2026 is expected to normalize as memory pricing headwinds and legacy mix pressures weigh on Aurora’s margins, the underlying demand backdrop remains constructive."

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