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ViaSat (VSAT) Down 29.2% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for ViaSat (VSAT - Free Report) . Shares have lost about 29.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is ViaSat due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Viasat Reports Narrower Q1 Loss on Higher Revenues
Viasat reported relatively healthy first-quarter fiscal 2025 results, with the top line surpassing the Zacks Consensus Estimate. The company reported higher revenues year over year, backed by solid demand trends in both segments. In addition, incremental revenues from Inmarsat contributed significantly to the top-line growth. An improved operating performance further led to a narrower-than-expected loss.
Net Income
The company incurred a net loss of $32.9 million or a loss of 26 cents per share compared with a net loss of $77 million or a loss of 83 cents per share in the year-ago quarter. The improved performance was primarily attributable to higher revenues. The bottom line was narrower than the Zacks Consensus Estimate of a loss of 42 cents.
Excluding non-recurring items, Viasat reported a non-GAAP net income of $39 million or 30 cents per share against a net loss of $0.4 million or break-even results in the year-earlier quarter.
Revenues
Revenues surged 44% to $1.13 billion, driven by solid defense orders, healthy services revenues, an incremental contribution from Inmarsat and a robust order pipeline. The top line surpassed the consensus estimate by $45 million.
Product revenues were $305.9 million, up from $236.4 million in the year-ago quarter. Net sales from Service improved to $820.7 million from $543.4 million a year ago.
During the quarter, Viasat restructured its operating segments to better reflect its existing businesses and offer investors greater transparency about its future growth opportunities. Effective from the first quarter of fiscal 2025, the company will have two distinct segments — Communication Services and Defense and Advanced Technologies.
The Communication Services segment encompasses four key business lines — Aviation, Government Satcom, Maritime, and Fixed and Other. The Defense and Advanced Technologies segment comprises Information Security and Cyber Defense, Space and Mission Systems, Tactical Networking, and Advanced Technologies and Other.
Revenues from the Communication Services segment improved to $826.8 million from $560.3 million in the year-ago quarter. The improvement is driven by strong growth in commercial and business aviation IFC services along with solid contribution from Inmarsat. A decline in the U.S. fixed broadband portfolio partially affected the net sales. The segment’s adjusted EBITDA nearly doubled to $307.7 million from $155.6 million, backed by Inmarsat revenues.
Revenues from Defense and Advanced Technologies were $299.7 million, up from $219.5 million in the year-ago quarter. Higher revenues from recurring licensing agreements and tactical networking products led to the year-over-year growth. Adjusted EBITDA came in at $96.3 million compared with $27.7 million a year ago.
Other Details
In the June quarter, the company reported an operating profit of $59.7 million against an operating loss of $41.5 million in the prior-year quarter. Adjusted EBITDA was $403.9 million, up from $183.3 million in the year-ago quarter.
Cash Flow & Liquidity
During the first quarter of fiscal 2025, Viasat generated an operating cash flow of $151 million compared with $104 million in the prior-year period. As of Jun 30, 2024, the company had $1.81 billion in cash and cash equivalents, with a net debt of $5.6 billion. Capital expenditures declined 20% year over year to $301 million, primarily due to lower satellite expenditures, customer premise equipment and general infrastructure costs.
Outlook
For fiscal 2025, management expects total revenues to remain roughly flat or increase slightly year over year. Adjusted EBITDA from continuing operations is projected to grow by mid-single digits. Revenues from Communication Services are expected to be slightly down in fiscal 2025, as a decline in U.S. fixed broadband revenue and non-broadband service components of maritime will more than offset strong growth in aviation services and government satcom services.
Defense and Advanced Technologies revenues are expected to increase in low-single digits, driven by tactical networking products, antenna systems solutions, recurring contributions from certain licensing agreements and strong demand for AI applications.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 6.48% due to these changes.
VGM Scores
Currently, ViaSat has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, ViaSat has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
ViaSat belongs to the Zacks Wireless Equipment industry. Another stock from the same industry, Juniper Networks (JNPR - Free Report) , has gained 0.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Juniper reported revenues of $1.19 billion in the last reported quarter, representing a year-over-year change of -16.8%. EPS of $0.31 for the same period compares with $0.58 a year ago.
For the current quarter, Juniper is expected to post earnings of $0.48 per share, indicating a change of -20% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
Juniper has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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ViaSat (VSAT) Down 29.2% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for ViaSat (VSAT - Free Report) . Shares have lost about 29.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is ViaSat due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Viasat Reports Narrower Q1 Loss on Higher Revenues
Viasat reported relatively healthy first-quarter fiscal 2025 results, with the top line surpassing the Zacks Consensus Estimate. The company reported higher revenues year over year, backed by solid demand trends in both segments. In addition, incremental revenues from Inmarsat contributed significantly to the top-line growth. An improved operating performance further led to a narrower-than-expected loss.
Net Income
The company incurred a net loss of $32.9 million or a loss of 26 cents per share compared with a net loss of $77 million or a loss of 83 cents per share in the year-ago quarter. The improved performance was primarily attributable to higher revenues. The bottom line was narrower than the Zacks Consensus Estimate of a loss of 42 cents.
Excluding non-recurring items, Viasat reported a non-GAAP net income of $39 million or 30 cents per share against a net loss of $0.4 million or break-even results in the year-earlier quarter.
Revenues
Revenues surged 44% to $1.13 billion, driven by solid defense orders, healthy services revenues, an incremental contribution from Inmarsat and a robust order pipeline. The top line surpassed the consensus estimate by $45 million.
Product revenues were $305.9 million, up from $236.4 million in the year-ago quarter. Net sales from Service improved to $820.7 million from $543.4 million a year ago.
During the quarter, Viasat restructured its operating segments to better reflect its existing businesses and offer investors greater transparency about its future growth opportunities. Effective from the first quarter of fiscal 2025, the company will have two distinct segments — Communication Services and Defense and Advanced Technologies.
The Communication Services segment encompasses four key business lines — Aviation, Government Satcom, Maritime, and Fixed and Other. The Defense and Advanced Technologies segment comprises Information Security and Cyber Defense, Space and Mission Systems, Tactical Networking, and Advanced Technologies and Other.
Revenues from the Communication Services segment improved to $826.8 million from $560.3 million in the year-ago quarter. The improvement is driven by strong growth in commercial and business aviation IFC services along with solid contribution from Inmarsat. A decline in the U.S. fixed broadband portfolio partially affected the net sales. The segment’s adjusted EBITDA nearly doubled to $307.7 million from $155.6 million, backed by Inmarsat revenues.
Revenues from Defense and Advanced Technologies were $299.7 million, up from $219.5 million in the year-ago quarter. Higher revenues from recurring licensing agreements and tactical networking products led to the year-over-year growth. Adjusted EBITDA came in at $96.3 million compared with $27.7 million a year ago.
Other Details
In the June quarter, the company reported an operating profit of $59.7 million against an operating loss of $41.5 million in the prior-year quarter. Adjusted EBITDA was $403.9 million, up from $183.3 million in the year-ago quarter.
Cash Flow & Liquidity
During the first quarter of fiscal 2025, Viasat generated an operating cash flow of $151 million compared with $104 million in the prior-year period. As of Jun 30, 2024, the company had $1.81 billion in cash and cash equivalents, with a net debt of $5.6 billion. Capital expenditures declined 20% year over year to $301 million, primarily due to lower satellite expenditures, customer premise equipment and general infrastructure costs.
Outlook
For fiscal 2025, management expects total revenues to remain roughly flat or increase slightly year over year. Adjusted EBITDA from continuing operations is projected to grow by mid-single digits. Revenues from Communication Services are expected to be slightly down in fiscal 2025, as a decline in U.S. fixed broadband revenue and non-broadband service components of maritime will more than offset strong growth in aviation services and government satcom services.
Defense and Advanced Technologies revenues are expected to increase in low-single digits, driven by tactical networking products, antenna systems solutions, recurring contributions from certain licensing agreements and strong demand for AI applications.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 6.48% due to these changes.
VGM Scores
Currently, ViaSat has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, ViaSat has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
ViaSat belongs to the Zacks Wireless Equipment industry. Another stock from the same industry, Juniper Networks (JNPR - Free Report) , has gained 0.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Juniper reported revenues of $1.19 billion in the last reported quarter, representing a year-over-year change of -16.8%. EPS of $0.31 for the same period compares with $0.58 a year ago.
For the current quarter, Juniper is expected to post earnings of $0.48 per share, indicating a change of -20% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
Juniper has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.