Cantor Fitzgerald maintains ViaSat stock Neutral with $12 target

Investing.com

Published May 20, 2025 08:36AM ET

Cantor Fitzgerald maintains ViaSat stock Neutral with $12 target

Tuesday, on the day of ViaSat Inc's (NASDAQ:VSAT) fourth-quarter fiscal year 2025 earnings release, Cantor Fitzgerald reiterated a Neutral rating and a $12.00 price target on the company's stock. According to InvestingPro data, VSAT shares have surged over 54% in the past six months, though they remain significantly below their 52-week high of $26.70. The stock currently trades at an attractive Price/Book multiple of 0.29x, suggesting potential undervaluation. Analyst Colin Canfield updated estimates in anticipation of the earnings report, which was scheduled for release after the market closed, with a conference call to follow at 5:30 PM ET.

Canfield's estimates for ViaSat reflect a projection of modest earnings growth and anticipated capital expenditure (capex) savings. However, the extent to which the company will experience a "capex holiday" remains uncertain. Such a holiday is often sought by investors as it can signal a period of reduced capital spending and potential free cash flow (FCF) improvements. InvestingPro analysis indicates the company is currently burning through cash rapidly, with a negative free cash flow yield of -23%. The analyst suggested that ViaSat is nearing the FCF expectations that are currently estimated by the Street at approximately $300 million or more for fiscal year 2027, as per FactSet.

The analyst noted that ViaSat's performance is likely to hinge on the durability of its earnings model in the face of increasing competition from Starlink, which is expanding its operations in both L-band and K-band RF technologies. The risk associated with the company's remaining geostationary orbit (GEO) satellite deployments, scheduled for late 2025 to early 2026, was also highlighted as a factor.

Despite the competitive pressures from Starlink, which Canfield believes are driving market development and disruption, the analyst expressed confidence in ViaSat's business model. However, the analyst pointed out that ViaSat's stock performance may be constrained until the successful deployment of its ViaSat-3 satellite portfolio. If these deployments are successful, the analyst anticipates that the attractiveness of ViaSat's FCF valuation could lead to significant upside for its shares.

Canfield concluded by stating that the firm remains watchful for key milestones that could improve ViaSat's risk profile between now and the upcoming satellite deployments. These milestones could potentially enhance investor perception of the stock's valuation and future prospects. InvestingPro reveals that despite current challenges, analysts remain cautiously optimistic, with multiple upward earnings revisions for the upcoming period. For deeper insights into ViaSat's financial health, valuation metrics, and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

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In other recent news, Viasat Inc. announced the early redemption of its 5.625% Senior Notes due September 2025, totaling $442,550,000. This financial move, confirmed in a recent SEC filing, aims to reduce the company's future interest expenses and debt load. Viasat utilized its available cash for the redemption, which was executed at the full principal amount, plus accrued interest. Additionally, Viasat has partnered with Blue Origin to demonstrate its InRange telemetry relay service as part of NASA's Communications Services Project. This collaboration will integrate Viasat's solutions on Blue Origin's New Glenn launch vehicle, with an initial flight test expected this year.

The company also launched its GX10A and GX10B satellite payloads for government use, enhancing broadband coverage over the Arctic. These payloads are part of the Arctic Satellite Broadband Mission operated by Space Norway and aim to support government operations and scientific research. Furthermore, Viasat's Executive Vice President and Chief Corporate Officer, Kevin Harkenrider, is set to retire by June 30, 2025, but will remain as a non-executive employee until the end of the year. The company has not yet announced a successor for Harkenrider, ensuring a structured transition process. These developments reflect Viasat's ongoing efforts to expand its global communications network and streamline its operations.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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