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Viasat (VSAT) Mobility Network Gets Operational in China

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Viasat Inc. (VSAT - Free Report) recently announced that its mobility network has become operational in China. This, in turn, is likely to enable the company to offer in-flight connectivity (IFC) solutions in domestic and international airlines operating in and out of the communist nation’s airspace by leveraging the Ka-band ChinaSat-16 satellite system.

Viasat deployed the network in collaboration with China Satellite Communications, Co. Ltd., which provided it regional access to the country’s highly regulated satellite communication services. The improved IFC services will offer enhanced Internet capabilities with best-in-class in-flight entertainment options to entice customers and likely contribute to the uptrend in leisure air travel demand.

Viasat’s Ka-band solutions enable business jet customers to enjoy high-speed Internet connectivity from takeoff to touchdown. It empowers aviation clients to reinforce their IFC investments and helps customers stay connected with smooth web browsing and streaming services. Equipped with unrivaled speed and quality, Viasat’s Ka-band service has been specifically designed to meet accretive demands of data backed by next-gen business applications. The Ka-band leverages global bandwidth to provide avant-garde Internet service with best-in-market pricing to boost the competitiveness of the business jet market.

The surging popularity of high-engagement IFC solutions has forced leading airline companies to scout for new ways to utilize Viasat’s high-capacity satellite solutions to maximize passenger satisfaction. The company’s impressive bandwidth productivity sets it apart from conventional and lower-yield satellite providers that run on incumbent business models. With an advanced level of Internet connectivity, airline carriers will offer customers an opportunity to stream all types of video content and seamlessly access free Wi-Fi aboard on air. In addition, it is likely to sow the seeds for future entertainment enhancements and personalization on customer seatback screens.

Viasat’s Satellite Services business is progressing well, with key metrics, including a steady rise of ARPU (average revenue per user) and revenues showing impressive growth. ARPU is growing on the back of a solid retail distribution network, which accounts for a growing proportion of high value and high bandwidth subscriber base. Further, the increasing adoption of in-flight Wi-Fi services in commercial aircraft and opening up of the airspace in China is likely to benefit the business in the long run.

The stock has gained 31.8% over the past year while the industry has rallied 21.2% in the same period. We remain impressed with the inherent growth potential of this Zacks Rank #3 (Hold) stock.
 

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A better-ranked stock in the industry is Clearfield, Inc. (CLFD - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Clearfield delivered an earnings surprise of 50.8%, on average, in the trailing four quarters. Earnings estimates for the current year for the stock have moved up 19.4% in the past 60 days. Over the past year, Clearfield has gained a stellar 181.7%.

Sierra Wireless, Inc. (SWIR - Free Report) carries a Zacks Rank #2 (Buy). It has a long-term earnings growth expectation of 12.5% and delivered an earnings surprise of 34.2%, on average, in the trailing four quarters.

Over the past year, Sierra Wireless has gained a solid 59.5%. The company continues to launch innovative products for business-critical operations that require high security and optimum 5G performance.

Qualcomm Incorporated (QCOM - Free Report) , carrying a Zacks Rank #2, is another solid pick for investors. It has a long-term earnings growth expectation of 17.5% and delivered an earnings surprise of 11.2%, on average, in the trailing four quarters.

Earnings estimates for the current year for the stock have moved up 14.7% in the past 90 days. Qualcomm is likely to benefit in the long run from a solid 5G traction and a surge in demand for essential products that are the building blocks for digital transformation in the cloud economy.