Viasat (VSAT) Could Be 34% Undervalued As Cash Flow Doubts Persist

Recent attention on Viasat (VSAT) has been driven by interest in ViaSat, Inc. Tokenized Stock on Robinhood, which provides economic exposure to the company through a 1:1 backed token structure.

Over the past year Viasat has delivered a 1 year total shareholder return of 108.38%. Recent trading has cooled, with the share price at $67.37 after a 1 day share price return decline of 7.37% and a 90 day share price return decline of 16.44%. This suggests momentum has been fading even as longer term total shareholder returns, including dividends, remain strong.

Compare Viasat's recent swing to other high conviction opportunities by scanning our hand picked 19 high quality undiscovered gems that may still be flying under the radar.

After such a strong 1 year total return, followed by a sharp pullback and a value score of 2, the question for Viasat now is whether most of the upside is already behind the stock or if the valuation still leaves room ahead.

Most Popular Narrative: 33.6% Undervalued

Viasat's most followed valuation narrative points to a fair value of $101.44 per share versus the last close at $67.37. That gap rests on specific assumptions about future revenue mix, satellite rollout and the use of spectrum assets.

The focus on operational efficiency, portfolio review, and progressing integration with Inmarsat, in addition to CapEx peaking with the ViaSat-3 program, sets up Viasat for positive free cash flow inflection, deleveraging, and earnings improvement as major investment cycles wind down.

Read the complete narrative. Read the complete narrative.

Want to see what is behind that near term cash burn and long term earnings inflection in the Viasat story? The narrative leans on steadier top line growth, rising margins and a future earnings multiple that lines up with sector leaders. Curious which exact revenue path and profitability shift need to play out to support a fair value above $100.

Result: Fair Value of $101.44 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the Viasat narrative still hinges on execution risks around the ViaSat-3 constellation and on the outcome of any Defense & Advanced Technologies spin out review.

Find out about the key risks to this Viasat narrative.

Another View on Viasat Using Cash Flows

The analyst narrative leans on future earnings and a higher P/E multiple to argue Viasat looks undervalued at $67.37 versus a $101.44 fair value. Our DCF model tells a different story. On projected cash flows, Viasat screens as overvalued with an estimated value of $55.45. Which lens do you trust more when cash generation and execution risk are front of mind?

For a closer look at how those cash flow assumptions are built and discounted, take a moment with the SWS DCF workup for Viasat, then compare it with the earnings based narrative in this article Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Viasat for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 44 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

The split views on Viasat can feel confusing, so move quickly from headlines to hard data and form your own stance. You can start by weighing the company’s 4 important warning signs.

Looking for more investment ideas beyond Viasat?

If you stop with Viasat, you could miss other opportunities that fit your style. Take a few minutes now to scan fresh ideas before markets move.

• Target potential value opportunities by reviewing companies that screen as attractively priced with solid fundamentals using the 44 high quality undervalued stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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