Is It Too Late to Consider Viasat After a 300% Rebound and DCF Upside?

• If you are wondering whether Viasat at around $38 is still a smart buy after its big rebound, or if you are late to the party, this breakdown is for you.
• The stock has climbed 8.9% in the last week and is up an eye catching 301.6% year to date, with a huge 317.8% gain over the past year that has put it firmly back on investors' radars.
• Behind those moves, Viasat has been in the headlines for expanding its satellite broadband footprint, securing new connectivity deals in aviation and defense, and working through the fallout and recovery plan from in orbit satellite issues. Together, these developments have reshaped how the market views both its long term growth potential and its risk profile.
• Despite the rally, Viasat still scores a solid 5/6 on our valuation checks, suggesting it screens as undervalued on most measures. Next, we will walk through the key valuation approaches investors use today, before finishing with a more holistic way to think about what the stock is really worth.

Viasat delivered 317.8% returns over the last year. See how this stacks up to the rest of the Communications industry.

Approach 1: Viasat Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a business is worth by projecting the cash it can generate in the future and discounting those cash flows back to today using a required rate of return.

For Viasat, the latest twelve month Free Cash Flow is currently negative at around $265 Million, reflecting heavy investment and recent in orbit issues. Analysts and extrapolated estimates, using a 2 Stage Free Cash Flow to Equity model, point to a sharp improvement, with Free Cash Flow projected to reach about $2.14 Billion by 2035. The early years draw on analyst forecasts up to 2028. After that point, Simply Wall St extends the trend using gradually slowing growth rates.

When all those future cash flows are discounted back to today, the model produces an intrinsic value of roughly $105.29 per share. Compared with the current share price near $38, the DCF implies Viasat is about 63.7% undervalued. This indicates the market is still heavily discounting its long term recovery story.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Viasat is undervalued by 63.7%. Track this in your watchlist or portfolio, or discover 905 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Viasat.

Approach 2: Viasat Price vs Sales

For companies that are investing heavily and not yet consistently profitable, revenue based metrics like the Price to Sales ratio are often more useful than earnings based ones. Sales tend to be more stable than earnings during investment cycles, so they provide a cleaner way to compare how the market is valuing each dollar of a company’s business.

In general, faster growing and lower risk companies may trade on higher multiples, while slower growing or riskier businesses may warrant a discount. Right now, Viasat trades on a Price to Sales ratio of about 1.13x. That is below both the Communications industry average of roughly 2.05x and the broader peer group average of around 3.63x.

Simply Wall St’s proprietary Fair Ratio framework goes a step further by estimating what Viasat’s Price to Sales multiple could be once its growth outlook, profitability profile, industry, market cap, and specific risks are all factored in. On this basis, Viasat’s Fair Ratio comes out at about 1.92x.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1446 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Viasat Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of Viasat’s future with a concrete forecast and fair value. A Narrative is your story behind the numbers, where you spell out how you expect Viasat’s revenue, earnings, and margins to evolve, and then link that story directly to an estimated fair value per share. On Simply Wall St’s Community page, used by millions of investors, Narratives are an easy, guided tool that help you decide how to compare your Fair Value to today’s Price, and they update dynamically whenever new news or earnings data arrives. For Viasat, one investor might build a “bullish connectivity leader” Narrative that leans toward the upper end of analyst targets and a higher fair value, while another might frame a “breakup risk and competition” Narrative closer to the lower analyst target, showing how different perspectives on bandwidth growth, margins, and breakup odds can lead to very different conclusions about whether the current price looks attractive or expensive.

Do you think there's more to the story for Viasat? Head over to our Community to see what others are saying!

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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