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Investing.com - William Blair upgraded ViaSat (NASDAQ:VSAT) from Market Perform to Outperform on Monday, citing "a plethora of catalysts" that improve the company’s stock prospects over the next year. The stock has already demonstrated strong momentum, with a remarkable 94.8% gain year-to-date, according to InvestingPro data.
The upgrade follows a tour of ViaSat’s Carlsbad headquarters that provided William Blair with deeper insight into the company’s defense tech business. On Friday, August 1, ViaSat management announced it will carefully evaluate the IPO or spinout of its defense tech business in response to a shareholder letter. With a current market capitalization of $2.63 billion and revenue of $4.52 billion in the last twelve months, the company maintains strong liquidity with a current ratio of 1.72.
William Blair highlighted several additional catalysts, including an expected $568 million cash payment in fiscal 2026 from ViaSat’s Ligado agreement, anticipated positive free cash flow in the second half of this year, and the upcoming launch of the final two ViaSat-3 satellites potentially later this year or early next year.
The firm also noted ViaSat’s inflight-connectivity business has resumed winning contracts after losing its United Airlines deal, while its maritime business may return to growth through NexusWave. ViaSat’s defense satellite connectivity continues to achieve growth as the connected battlefield becomes a strategic imperative.
William Blair believes these positive catalysts will be magnified by ViaSat’s leverage structure, with $2.2 billion of equity relative to $5.6 billion in net debt, suggesting "greater than 100% upside to ViaSat shares over the next year" based on their sum-of-the-parts analysis. InvestingPro analysis reveals 8 additional key investment factors and a comprehensive research report, offering deeper insights into ViaSat’s financial health and growth potential.
In other recent news, Viasat Inc. announced a settlement agreement with Ligado Networks and AST & Science, expecting to receive $568 million from Ligado in fiscal year 2026, which will be used to manage near-term debt maturities. The company’s fourth fiscal quarter of 2025 results showed a 1.4% increase in revenue compared to consensus estimates, although it was a slight decline of 0.3% year-over-year. Viasat’s adjusted EBITDA fell short by 3% against consensus but rose by 4.8% year-over-year, with notable growth in the Government Satellite Communications and Digital Airware Technologies sectors. Meanwhile, Carronade Capital Management, an investment firm holding a 2.3% stake in Viasat, is advocating for the company to spin off its Defense and Advanced Technologies business, suggesting this could unlock up to $11 billion in value. In corporate governance developments, Viasat revised its Stockholder Agreements with certain former shareholders and announced a director’s resignation. Needham analysts recently lowered their price target for Viasat shares to $16 from $19, although they maintained a Buy rating. Carronade Capital also highlighted the potential undervaluation of Viasat’s Defense and Advanced Technologies segment, proposing it could be worth significantly more as a separate entity.
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