ViaSat, Inc.

VSAT Details

ViaSat, Inc. (NYSE: VSAT) is a military and commercial provider of high-speed satellite broadband services and secure networking technologies.

Latest News & Announcement

• Launch of Advanced Antennas: The group announced the release of its most sophisticated antennas on January 20, 2022, which will be capable of providing increased space-to-ground communications to the US and other spacefaring nations for planned Earth observation missions as well as DoD efforts.

• Partnership with US Navy: The business has strengthened its collaboration with Navy Exchange Service Command (NEXCOM) to offer high-quality telecommunication to sailors. After this collaboration, NEXCOM will provide a better experience for Navy and Air Force personnel.

• Q3FY22 Result Update: The company announced that it would release its Q3FY22 financial results as on February 3, 2022.

Q2FY22 Results:

Source: Company Website

• Increase in Top Line: The company reported decent topline growth in the quarter just gone by with revenue climbed by 26.53% to USD 701.35 million in Q2FY22 from USD 554.28 million in Q2FY21, mainly due to expansion and recent agreements.
• Increase in Bottom Line: Due to low-interest expense, the company's net income increased by 51.9% to USD 5.15 million in Q2FY22 from USD 3.39 million in Q2FY21.
• Reported Positive Operating Cash Flows: In Q2FY22, the company had positive operating cash flows of USD 23.16 million, compared to a negative cash flow of USD 5.14 million in Q2FY21.

Key Risks:

• Business Risk and Contractual Restrictions: Due to expectations of a rate hike by the US Federal Reserves in the coming month, the organization is at risk of a business interruption, making it harder to retain connections with suppliers and consumers. Contractual constraints might also get postponed.

Outlook:

This quarter, the company performed well, and it continues to reduce debt over the past few quarters. Because of current arrangements and expansion, the order backlog is also expanding. In addition, following the acquisition of the remaining ownership in Euro Infrastructure Co. in the first quarter of the fiscal year 2022, the business controls three satellites in service over North America (ViaSat-2, ViaSat-1, and WildBlue-1). The company expects its various operations to provide robustness for the rest of the fiscal year 2022.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

Source: Analysis by Kalkine Group

Technical Summary Analysis:

VSAT Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

VSAT’s share price has decreased by 22.31% in the past three months and is currently leaning towards the 52-week low of USD41.88.  Further, the company reported decent performance in the quarter just gone by and consistently strengthened its balance sheet. We have valued the stock using the EV / Sales multiple based relative valuation methodology and arrived at a target price of USD 52.59 as of January 27, 2022.

Hence, Considering the major correction in the stock price, growing business model, strong revenue track record, and current valuation, we recommend a “BUY" rating on the stock at the closing price of USD 44.50 as of January 27, 2022.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

* Depending on risk tolerance, investors may consider unwinding their positions in an individual stock once the estimated target price is reached.