Viasat (VSAT): Reassessing Valuation After Major SouthPAN Satellite Contract Win and Analyst Upgrades

If you have been following Viasat (VSAT), the company’s latest $252 million contract win for the SouthPAN satellite project in Australia and New Zealand is tough to ignore. By expanding its role in delivering advanced positioning and navigation services to critical sectors such as agriculture, aviation, and emergency response, Viasat is reinforcing its standing in strategically important regional markets. This new agreement, which builds on a previous SouthPAN award, signals both customer confidence and the company’s initiative in capturing new, growing end markets for satellite-based solutions. The positive news has not gone unnoticed in the market. Over the past month, Viasat’s shares have climbed an impressive 81 percent, while the annual return sits at 63 percent. Momentum has surged in tandem with recent contract awards, upward earnings estimate revisions, and a series of confidence-building product launches. However, when taking a broader view over the past three and five years, investors who held through that period are still in the red. This indicates that the recent surge represents a relatively new shift after years of muted performance. With such a sharp run-up in the stock this year and analyst upgrades highlighting Viasat's value, investors may be considering whether there is still room for further gains or if the market already reflects the potential upside from these developments.

Most Popular Narrative: 15% Overvalued

According to community narrative, Viasat is currently considered overvalued by 15 percent, with its fair value estimated at $24.29 per share using a 12.32 percent discount rate. Analysts combine multiple business drivers and risk factors to reach this consensus, balancing excitement over future revenues and cash flows with strong competition and significant spending requirements.

"Accelerating rollout of the ViaSat-3 global satellite constellation will substantially increase total bandwidth and coverage, opening up new customer segments and enabling service launches (notably in-flight, maritime, and rural fixed broadband). This provides a pathway for higher ARPU and a stronger top-line growth trajectory."

This perspective focuses on potential. Why do experts think the stock is priced too high? The answer lies in high expectations for future profit margins and some projected financial figures that may be surprising. Explore the assumptions and underlying factors influencing this notable valuation shift.

Result: Fair Value of $24.29 (OVERVALUED)

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

However, significant capital outlays and declining U.S. broadband subscribers could challenge Viasat’s earnings outlook and temper future growth expectations.

Find out about the key risks to this Viasat narrative.

Another View: Discounted Cash Flow Lens

Taking a different approach, our DCF model uses long-term cash flow projections to estimate value. It arrives at a result that suggests Viasat might still be far below its true worth. Could the market be missing something?

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 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Viasat Narrative

If you have your own perspective or want to dig deeper into the data, you can easily build and share your own take in just a few minutes. So why not do it your way?

A great starting point for your Viasat research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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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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