Viasat: From Hardware to Global Connectivity
Tips E-04: A 1-minute summary of my fundamental analysis of Viasat Inc. (VSAT).
Investment Thesis
Viasat vertically integrated model and global reach position it well for long-term satellite connectivity demand. However, despite operating cash flow strength, high reinvestment needs and optimistic assumptions mean the stock is not attractively priced.
Main Business
Viasat has evolved from a hardware supplier into a vertically integrated global communications platform with three main segments. Satellite services, commercial networks, and government systems form its core.
Growth
Revenue grew at a 12.6% CAGR over the past decade, aided recently by Inmarsat integration. The business targets broadband, mobility, and defense communications - sectors expected to expand steadily over the next decade
Profitability
Margins have been historically weak due to high fixed costs, subsidized hardware, and slow adoption of capacity. Signs of improvement emerged in 2025 through higher contribution margins and reduced costs, pointing toward sustained breakeven and potential margin expansion.
Financial Strength
Viasat consistently generated positive operating cash flow but carries a moderately stretched balance sheet. With USD 1.6 billion cash reserves and steady cash generation, liquidity is solid.
Peer Performance
Relative to peers, Viasat underperformed on EBIT margins, return on capital, and free cash flow. Although recent improvements narrow the gap, peer benchmarks underscore the challenge in achieving competitive returns
Valuation
Optimistic discounted cash flow analysis values Viasat at USD 2.36 per share versus its USD 8.33 market price.
For more insights and valuation details, refer to the original article on Seeking Alpha “Viasat After Inmarsat - Moving Beyond Breakeven”
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Disclaimer & DisclosureI am not an investment adviser, security analyst, or stockbroker. The contents are meant for educational purposes and should not be taken as any recommendation to purchase or dispose of shares in the featured companies. Investments or strategies mentioned on this website may not be suitable for you and you should have your own independent decision regarding them.
The opinions expressed here are based on information I consider reliable but I do not warrant its completeness or accuracy and should not be relied on as such.
I may have equity interests in some of the companies featured.
This blog is reader-supported. When you buy through links in the post, the blog will earn a small commission. The payment comes from the retailer and not from you.
Disclaimer & Disclosure
I am not an investment adviser, security analyst, or stockbroker. The contents are meant for educational purposes and should not be taken as any recommendation to purchase or dispose of shares in the featured companies. Investments or strategies mentioned on this website may not be suitable for you and you should have your own independent decision regarding them.
The opinions expressed here are based on information I consider reliable but I do not warrant its completeness or accuracy and should not be relied on as such.
I may have equity interests in some of the companies featured.
This blog is reader-supported. When you buy through links in the post, the blog will earn a small commission. The payment comes from the retailer and not from you.
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