VSAT: Future Breakup Optionality And Competitive Pressures Will Shape Share Performance

Analysts have raised their price target on Viasat to $23 from $10, citing a higher potential breakup valuation around $36 per share but warning that intensifying competition and limited satellite growth prospects temper the upside.

Analyst Commentary

Bullish analysts highlight that the higher price target reflects improved breakup value potential, suggesting that the sum of Viasat's parts could be worth meaningfully more than the current share price in an optimal strategic scenario.

Bullish Takeaways

• The increased price target signals that analysts see upside in a potential strategic review, with a breakup scenario supporting a valuation well above the current trading range.
• Current valuation is viewed as discounting the full value of Viasat's assets, particularly in connectivity and spectrum, leaving room for rerating if management executes on portfolio optimization.
• Even with muted satellite growth, analysts believe cost discipline and asset monetization could support cash flow stability, underpinning the higher target.

Bearish Takeaways

• Bearish analysts emphasize that the base case does not assume a breakup, noting that the higher theoretical valuation is contingent on a transaction that has no clear timeline or certainty.
• Intensifying competition in satellite connectivity is expected to pressure pricing and margins, limiting organic growth and justifying a more cautious stance on execution.
• Limited visibility into new satellite capacity and growth projects constrains the long term growth narrative, prompting concerns that earnings may not keep pace with the raised valuation expectations.
• The downgrade in rating, despite a higher target, reflects concerns that near term risk to estimates and competitive headwinds could cap share price appreciation relative to peers.

What's in the News

• Successful launch of ViaSat-3 Flight 2 satellite, expected to double Viasat's total fleet bandwidth and enter service in early 2026, supporting mobility, fixed broadband, and defense customers (Key Developments).
• Major expansion of in-flight connectivity footprint as Etihad Airways and Azerbaijan Airlines commit to equip fleets with Viasat Amara high speed Wi Fi and wireless entertainment platforms (Key Developments).
• Selection by the U.S. Space Force for the Protected Tactical SATCOM Global program, which positions Viasat as a potential end to end satellite manufacturer under a multibillion dollar IDIQ contract (Key Developments).
• Advances in launch telemetry and near Earth communications with a successful HaloNet data relay demonstration on Blue Origin's New Glenn rocket and new InRange service contracts with INNOSPACE and Skyrora (Key Developments).
• Maritime connectivity upgrades as Inmarsat Maritime expands NexusWave service, using ViaSat 3 satellites and new VS60 terminals to deliver higher bandwidth and more consistent speeds at sea (Key Developments).

Valuation Changes

• Fair Value: Unchanged at $36.25 per share, indicating no revision to the long term intrinsic valuation estimate.
• Discount Rate: Fallen slightly from 11.92 percent to 11.75 percent, implying a modestly lower perceived risk profile or cost of capital.
• Revenue Growth: Essentially unchanged at around 3.95 percent, signaling stable expectations for top line expansion.
• Net Profit Margin: Edged down slightly from about 10.00 percent to 9.96 percent, reflecting a marginally less optimistic view on profitability.
• Future P/E: Decreased very slightly from 15.31x to 15.29x, suggesting a negligible adjustment to the forward earnings multiple applied in the valuation.