ViaSat (VSAT) is a stock at the top of my Stocks on the Radar. I came oh-so-close to buying VSAT recently, and now it’s good I didn’t. After the company reported last quarter’s earnings the stock dropped and now I don’t know if this is a good time to climb aboard.
ViaSat utilizes its satellites in space to offer high-speed internet and broadband services. The company is best known for providing government communications, like planes in the Armed Forces communicating with communication centers on land. VSAT does a lot of commercial networks as well. For more on the company check out the colorful ViaSat 2013 Annual Report.
I liked VSAT stock because I felt the company could provide Internet services to passengers in airplanes in the near future. But now I have found Gogo Inflight Internet (GOGO) is looking like the passenger inflight leader. GOGO doesn’t use costly satellites to get you connected either, it’s platform is on land. GOGO charges $5 or so for in-flight internet access but I was just on a Delta flight and overheard the stewardess say the plane had free in-flight Wi-Fi.
Still, I like VSAT stock and should probably buy it. The United States will keep the company busy all by itself. Let’s take a look at VSAT’s numbers:
One Year Chart
I really appreciate the two big spikes the stock got after it reported earnings. That’s a strong sign for a leading stock. But last quarter the company had 600% profit growth in addition to 25% revenue growth and the stock dropped. This might be because quarterly estimates for future quarters fell, but I didn’t read too much into it. The stock’s movement means more to me — and momentum just turned down.
Fair Value
The nice thing about VSAT is profits are now set to grow from $0.61 this year to $3.00 in 2015. That’s an amazing feat, but this is a different company with costs Im’ not aware of, so who knows if this will actually happen, or that it will push the stock higher. What concerns me is VSAT was growing nicely during 2007-2009 and then profits fell. So I don’t have a lot of certainty in this stock.
Sharek’s Take
VSAT stays at the top of my radar, but I’m hesitant about getting into the stock because it’s more complex technology than bricks-and-mortar and the momentum just turned down. I also feel the stock market is high right now and that I need stocks to buy if the market dips, and VSAT is certainly one to consider if (or when) it does.
View the Earnings Table here. View the Profit History here.View the Ten Year Chart here.
