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Why Is ViaSat (VSAT) Up 23.4% Since Last Earnings Report?
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It has been about a month since the last earnings report for ViaSat (VSAT - Free Report) . Shares have added about 23.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is ViaSat due for a pullback? 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 catalysts.
Viasat Beats Q2 Earnings Estimates on Solid Revenues
Viasat reported healthy second-quarter fiscal 2024 results, with both the bottom line and top line beating the respective Zacks Consensus Estimate. The company reported higher revenues year over year, backed by healthy demand trends in all verticals. Growth in commercial air IFC services, rising shipments and installments of mobility terminals, and growing demand for information assurance products supported the top line during the quarter. However, the decline in fixed broadband subscribers partially reversed this trend.
Net Income
The company incurred a net loss of $767.2 million or a loss of $6.16 per share compared with a net loss of $48.2 million or a loss of 64 cents per share in the prior-year quarter. High interest expenses and satellite impairment charges adversely impacted the bottom line during the quarter.
Excluding non-recurring items, Viasat recorded a non-GAAP net income of $149.7 million or $1.19 per share against a net loss of $13.6 million or a loss of 18 cents per share in the prior-year period. The bottom line beat the Zacks Consensus Estimate of 48 cents.
Revenues
Revenues surged 64.5% to $1,225.4 million driven by solid growth in product and service revenues. The top line surpassed the consensus estimate of $1,057 million.
Product revenues were $401.7 million, up from $261 million in the year-ago quarter. Net sales from Service more than doubled to $823.7 million from $402.6 million in the year-ago quarter.
Revenues from Satellite Services improved to $585.3 million from $300.5 million in the year-ago quarter. The nearly two-fold rise was driven by healthy demand for commercial air IFC services and incremental contribution from the Inmarsat buyout. The segment’s adjusted EBITDA more than tripled to $302 million from $92 million, backed by higher commercial air IFC service activations and a full quarter contribution from Inmarsat.
Commercial network contributed $275 million in revenues, up 52.8% year over year. Solid demand for Antenna system products and positive momentum of IFC orders supported the gain from this vertical. Adjusted EBITDA came in at $66 million, up from $21 million a year ago.
The Government Systems segment registered revenues of $365 million from continuing operations, up 99% year over year. Higher information assurance product deliveries supported the top line. The segment’s adjusted EBITDA from continuing operations was $118 million, up from $44 million, backed by the contribution from Inmarsat and solid product revenues.
Other Details
In the September quarter, the company reported an operating loss of $804.7 million against an operating income of $4.7 million in the prior-year quarter. Adjusted EBITDA was $486.3 million, up from $188.3 million in the year-ago quarter.
Cash Flow & Liquidity
During the second quarter of fiscal 2024, Viasat generated an operating cash flow of $219 million compared with $188 million in the prior-year period. As of Sep 30, 2023, the company has $1,961.6 million in cash and cash equivalents, with a net debt of $5.6 billion.
Outlook
For fiscal 2024, management expects revenues to increase high single digit year over year in the range of $4.1-$4.25 billion. Adjusted EBITDA from continuing operations is expected to increase mid-single digit. Viasat anticipates strong growth in Government Systems and Commercial Network segments with a relatively modest year-over-year growth in Satellite Services.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -5.22% due to these changes.
VGM Scores
At this time, ViaSat has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, ViaSat has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
ViaSat is part of the Zacks Wireless Equipment industry. Over the past month, Juniper Networks (JNPR - Free Report) , a stock from the same industry, has gained 7.8%. The company reported its results for the quarter ended September 2023 more than a month ago.
Juniper reported revenues of $1.4 billion in the last reported quarter, representing a year-over-year change of -1.2%. EPS of $0.60 for the same period compares with $0.58 a year ago.
Juniper is expected to post earnings of $0.64 per share for the current quarter, representing a year-over-year change of -1.5%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.7%.
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 A.
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Why Is ViaSat (VSAT) Up 23.4% Since Last Earnings Report?
It has been about a month since the last earnings report for ViaSat (VSAT - Free Report) . Shares have added about 23.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is ViaSat due for a pullback? 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 catalysts.
Viasat Beats Q2 Earnings Estimates on Solid Revenues
Viasat reported healthy second-quarter fiscal 2024 results, with both the bottom line and top line beating the respective Zacks Consensus Estimate. The company reported higher revenues year over year, backed by healthy demand trends in all verticals. Growth in commercial air IFC services, rising shipments and installments of mobility terminals, and growing demand for information assurance products supported the top line during the quarter. However, the decline in fixed broadband subscribers partially reversed this trend.
Net Income
The company incurred a net loss of $767.2 million or a loss of $6.16 per share compared with a net loss of $48.2 million or a loss of 64 cents per share in the prior-year quarter. High interest expenses and satellite impairment charges adversely impacted the bottom line during the quarter.
Excluding non-recurring items, Viasat recorded a non-GAAP net income of $149.7 million or $1.19 per share against a net loss of $13.6 million or a loss of 18 cents per share in the prior-year period. The bottom line beat the Zacks Consensus Estimate of 48 cents.
Revenues
Revenues surged 64.5% to $1,225.4 million driven by solid growth in product and service revenues. The top line surpassed the consensus estimate of $1,057 million.
Product revenues were $401.7 million, up from $261 million in the year-ago quarter. Net sales from Service more than doubled to $823.7 million from $402.6 million in the year-ago quarter.
Revenues from Satellite Services improved to $585.3 million from $300.5 million in the year-ago quarter. The nearly two-fold rise was driven by healthy demand for commercial air IFC services and incremental contribution from the Inmarsat buyout. The segment’s adjusted EBITDA more than tripled to $302 million from $92 million, backed by higher commercial air IFC service activations and a full quarter contribution from Inmarsat.
Commercial network contributed $275 million in revenues, up 52.8% year over year. Solid demand for Antenna system products and positive momentum of IFC orders supported the gain from this vertical. Adjusted EBITDA came in at $66 million, up from $21 million a year ago.
The Government Systems segment registered revenues of $365 million from continuing operations, up 99% year over year. Higher information assurance product deliveries supported the top line. The segment’s adjusted EBITDA from continuing operations was $118 million, up from $44 million, backed by the contribution from Inmarsat and solid product revenues.
Other Details
In the September quarter, the company reported an operating loss of $804.7 million against an operating income of $4.7 million in the prior-year quarter. Adjusted EBITDA was $486.3 million, up from $188.3 million in the year-ago quarter.
Cash Flow & Liquidity
During the second quarter of fiscal 2024, Viasat generated an operating cash flow of $219 million compared with $188 million in the prior-year period. As of Sep 30, 2023, the company has $1,961.6 million in cash and cash equivalents, with a net debt of $5.6 billion.
Outlook
For fiscal 2024, management expects revenues to increase high single digit year over year in the range of $4.1-$4.25 billion. Adjusted EBITDA from continuing operations is expected to increase mid-single digit. Viasat anticipates strong growth in Government Systems and Commercial Network segments with a relatively modest year-over-year growth in Satellite Services.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -5.22% due to these changes.
VGM Scores
At this time, ViaSat has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, ViaSat has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
ViaSat is part of the Zacks Wireless Equipment industry. Over the past month, Juniper Networks (JNPR - Free Report) , a stock from the same industry, has gained 7.8%. The company reported its results for the quarter ended September 2023 more than a month ago.
Juniper reported revenues of $1.4 billion in the last reported quarter, representing a year-over-year change of -1.2%. EPS of $0.60 for the same period compares with $0.58 a year ago.
Juniper is expected to post earnings of $0.64 per share for the current quarter, representing a year-over-year change of -1.5%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.7%.
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 A.