$VSAT is undervalued, I think. Someone prove me wrong
Viasat stock is down hard. From $30 earlier this year to under $9 now. The market’s missing the bigger picture. The business is solid, the strategy is tight, and the upside is big. Here’s why:
The Inmarsat Deal
Viasat bought Inmarsat for $7.3 billion in 2023. Inmarsat gives Viasat a global network with 19 satellites. The deal expands Viasat into aviation, maritime, and enterprise markets. Expected $1.5 billion in synergies will lead to lower costs and better efficiency. This creates the world’s largest satellite communications network.
Growth in Defense and Aviation
Defense revenue grew 37% YoY. Governments want secure satellite communications, and Viasat delivers. The U.S. awarded Viasat a $153 million defense contract this year. Airlines like Delta, United, and American use Viasat for in-flight internet. Post-COVID travel is up. In-flight connectivity demand is growing at 15% CAGR through 2027, and Viasat is leading the way in aviation and secure government contracts.
The Pivot to Enterprise
Viasat is moving away from low-margin residential broadband. The focus is now on enterprise and government clients, which means bigger contracts and higher margins. Enterprise clients need secure, high-bandwidth solutions, and Viasat is filling that gap.
Viasat-3: Game-Changer
Viasat-3 satellites boost global coverage and bandwidth. Speeds are faster, and latency is lower. This puts Viasat in direct competition with Starlink, but with a better focus: enterprise, aviation, and defense. Viasat isn’t chasing consumers; they’re after big contracts.
Synergies from Inmarsat
Combining Inmarsat’s aviation and maritime expertise with Viasat’s technology strengthens both businesses. Cost synergies of $1.5 billion over five years mean better margins. Expanded bandwidth lets Viasat serve more enterprise and defense clients. Inmarsat also has strong cash flow, reducing pressure from acquisition debt.
Political Moves: A Signal
Congresswoman Debbie Wasserman Schultz bought Viasat shares this year. The purchase was tied to Viasat’s $153 million defense contract. She’s on the Military Construction Subcommittee and understands defense spending. This signals confidence in Viasat’s positioning in defense markets.
Technicals and Valuation
The stock trades at 0.6x P/S ratio, well below industry averages of 2.5x. Short interest is 17% of the float. High short interest could spark a squeeze if momentum builds. Revenue hit $1.13 billion in Q1 FY25, up 44% YoY, driven by Inmarsat and defense contracts. Long-term, synergies will improve EBITDA margins and cash flow.
Risks
Integrating Inmarsat could take time and resources. Competition from Starlink is real, but Viasat’s enterprise and defense focus keeps them in their lane.
Where It Can Go
Near-term: $15–$18 as revenue and synergies gain recognition. Long-term: $25–$30 as Viasat becomes the dominant player in enterprise satellite communications.
So yes I do think viasat is undervalued, misunderstood, and set for a rebound. Big satellites, strong synergies, and solid growth in defense and aviation make this a strong buy.
The Inmarsat Deal
Viasat bought Inmarsat for $7.3 billion in 2023. Inmarsat gives Viasat a global network with 19 satellites. The deal expands Viasat into aviation, maritime, and enterprise markets. Expected $1.5 billion in synergies will lead to lower costs and better efficiency. This creates the world’s largest satellite communications network.
Growth in Defense and Aviation
Defense revenue grew 37% YoY. Governments want secure satellite communications, and Viasat delivers. The U.S. awarded Viasat a $153 million defense contract this year. Airlines like Delta, United, and American use Viasat for in-flight internet. Post-COVID travel is up. In-flight connectivity demand is growing at 15% CAGR through 2027, and Viasat is leading the way in aviation and secure government contracts.
The Pivot to Enterprise
Viasat is moving away from low-margin residential broadband. The focus is now on enterprise and government clients, which means bigger contracts and higher margins. Enterprise clients need secure, high-bandwidth solutions, and Viasat is filling that gap.
Viasat-3: Game-Changer
Viasat-3 satellites boost global coverage and bandwidth. Speeds are faster, and latency is lower. This puts Viasat in direct competition with Starlink, but with a better focus: enterprise, aviation, and defense. Viasat isn’t chasing consumers; they’re after big contracts.
Synergies from Inmarsat
Combining Inmarsat’s aviation and maritime expertise with Viasat’s technology strengthens both businesses. Cost synergies of $1.5 billion over five years mean better margins. Expanded bandwidth lets Viasat serve more enterprise and defense clients. Inmarsat also has strong cash flow, reducing pressure from acquisition debt.
Political Moves: A Signal
Congresswoman Debbie Wasserman Schultz bought Viasat shares this year. The purchase was tied to Viasat’s $153 million defense contract. She’s on the Military Construction Subcommittee and understands defense spending. This signals confidence in Viasat’s positioning in defense markets.
Technicals and Valuation
The stock trades at 0.6x P/S ratio, well below industry averages of 2.5x. Short interest is 17% of the float. High short interest could spark a squeeze if momentum builds. Revenue hit $1.13 billion in Q1 FY25, up 44% YoY, driven by Inmarsat and defense contracts. Long-term, synergies will improve EBITDA margins and cash flow.
Risks
Integrating Inmarsat could take time and resources. Competition from Starlink is real, but Viasat’s enterprise and defense focus keeps them in their lane.
Where It Can Go
Near-term: $15–$18 as revenue and synergies gain recognition. Long-term: $25–$30 as Viasat becomes the dominant player in enterprise satellite communications.
So yes I do think viasat is undervalued, misunderstood, and set for a rebound. Big satellites, strong synergies, and solid growth in defense and aviation make this a strong buy.
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