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Investing.com -- Viasat (NASDAQ:VSAT) stock surged 20% after William Blair upgraded the satellite communications company to Outperform from Market Perform, citing several catalysts that could drive significant upside.
Analyst Louie DiPalma’s upgrade comes shortly after Viasat announced it would evaluate a potential IPO or spinoff of its defense technology business. This announcement was made in response to pressure from activist investor Carronade Capital Management, which owns approximately 2.6% of Viasat shares.
"We are upgrading ViaSat shares to Outperform on a plethora of catalysts that improve the company’s stock prospects over the next year, and following a tour of the company’s Carlsbad headquarters that provided a deep dive into ViaSat’s defense tech business," DiPalma wrote in his research note.
The analyst highlighted seven key catalysts, including the potential defense tech business separation, an expected $568 million cash infusion from Ligado in fiscal 2026, and projections that Viasat will become free cash flow positive in the second half of this year. Additional catalysts include upcoming launches of two ViaSat-3 satellites, new wins in the inflight connectivity business, potential growth in maritime operations through NexusWave, and continued strong performance in defense satellite connectivity.
DiPalma suggested that a defense business IPO could shift investor valuation methodology from cash flow to sum-of-the-parts, potentially delivering "greater than 100% upside to ViaSat shares over the next year."
Carronade Capital has been advocating for the separation of Viasat’s Defense and Advanced Technologies segment, arguing it could be one of the most attractive pure-play defense technology platforms in the market with its double-digit revenue growth and strong margins. The activist believes such a move could drive Viasat’s share price to $100.
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