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Viasat's (VSAT) MMT Proves Ready for Emergency Situations

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Viasat Inc. (VSAT - Free Report) recently announced that its Multi-Mission Terminal (MMT) has been proven ready for battlefield during the Saber Strike 2018 exercise. Recognized as the AN/TSC-241, the MMT facilitates rapid communication for warfighters and first responders during emergency situations. As a matter of fact, the company’s MMT is validated for buying and immediate use across all the branches of the U.S. military as well as other Five Eyes military branches.

Leveraging a portable terminal design, the company’s MMT facilitates delivery of high-quality IP-based voice, video and data networking across several networks. Notably, the MMT enables warfighters and first responders to access networks as well as create command post communications in the forward operating bases. Importantly, the field exercise proved the setting up of the MMT to be simple, with its integrated smartphone app allowing easy establishment of communications for field personnel in less than half an hour.

The MMT can be integrated into the company’s Hybrid Adaptive Network architecture (HAN). Notably, the HAN facilitates seamless operation across both private sector and military communication networks for the warfighters. Also, with the help of the MMT's Software Defined Modem, customers can switch between several waveforms apart from upgrading to the company’s next-generation Ka-band network. Presently, the MMT is available across all branches of U.S. military and government.

Our Take

Although Viasat’s R&D activities bode well for the long term, these weigh on its net income for the quarters to come. As a matter of fact, the company anticipates witnessing huge increase in R&D activities related to the launch of ViaSat-3 satellites that can materially impact its margins and bottom line, moving ahead. Meanwhile, in the past six months, Viasat stock has declined 0.8% against the industry’s growth of 21.4%.

Also, the Zacks Rank #4 (Sell) company operates in a highly dynamic and competitive market, which includes stalwarts from varied industries. Notably, its government systems segment faces threats from manufacturers of defense electronics products and systems. Hence, to combat such competitive pressure, the company has to continuously customize its network offering per needs, enhance the cost-effectiveness of its products and services, and boost the satellite data networks.

Further, Viasat depends on the U.S. government contracts for a major part of its revenues. Going forward, any additional federal budgetary pressures may lead to in deeper-than-expected cuts in defense spending, which can impact the company’s business prospects. This apart, a shift in the U.S. government’s foreign policy may result in the termination of some major international contracts.

Key Picks

Some better-ranked stocks from the same space are Ubiquiti Networks, Inc. (UBNT - Free Report) , Comtech Telecommunications Corp. (CMTL - Free Report) and Adobe Systems Incorporated (ADBE - Free Report) . While Ubiquiti Networks and Comtech Telecommunications sport a Zacks Rank #1 (Strong Buy), Adobe Systems carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ubiquiti Networks surpassed estimates thrice in the trailing four quarters with an average positive earnings surprise of 8.96%.

Comtech Telecommunications outpaced estimates in each of the preceding four quarters with an average earnings surprise of 136.02%.

Adobe Systems exceeded estimates in each of the preceding four quarters with an average positive earnings surprise of 7.03%.

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