William Blair Says Amazon's Acquisition of GlobalStar Will Enhance Market Position
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy VSAT?
William Blair contends that Amazon's (AMZN) proposed acquisition of GlobalStar (GSAT) and agreement with Apple (AAPL) positions the company to "become a third major player" in the direct-to-device market that is led by SpaceX and AST SpaceMobile (ASTS). In addition, the proposed purchase price for GlobalStar increased the value of Iridium's (IRDM) and ViaSat's (VSAT) spectrum assets, argues the analyst, who notes that the $11B purchase price is higher than the previously reported $10B.
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Analyst Views on VSAT
Wall Street analysts forecast VSAT stock price to fall
6 Analyst Rating
4 Buy
2 Hold
0 Sell
Moderate Buy
Current: 59.920
Low
36.00
Averages
43.80
High
52.00
Current: 59.920
Low
36.00
Averages
43.80
High
52.00
About VSAT
Viasat, Inc. is a global communications company. Its segments include communication services and defense and advanced technologies. The communication services segment provides a wide range of broadband and narrowband communications solutions across government and commercial mobility markets, as well as for residential and enterprise fixed broadband customers. In addition, this segment includes the development and sale of a wide array of advanced satellite and wireless products and terminals that support or enable the provision of fixed and mobile broadband and narrowband services. The defense and advanced technologies segment develops and offers a diverse array of vertically integrated solutions to government and commercial customers, leveraging its core technical competencies in encryption, cybersecurity, tactical gateways, modems and waveforms. Its services are designed to provide customers with the capacity density, market access, speed, bandwidth and responsiveness they need.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Viasat Unveils Next-Gen Satellite Communication Terminal
- Technical Evaluation Process: Viasat announced at the Aircraft Interior Expo that it has entered Boeing's technical evaluation process to assess its next-generation electronically steered antenna terminal, AERA, across all current Boeing commercial airplane programs, marking a significant alignment with Boeing's future connectivity architecture.
- Market Launch Plan: Viasat AERA is set to enter the market in early 2028, utilizing simultaneous multibeam technology designed to unlock unprecedented multi-orbit flexibility, providing airlines with greater reliability and passengers with a smoother Wi-Fi experience, thereby enhancing overall customer satisfaction.
- Lightweight Design Advantages: The AERA terminal features a low-profile design that delivers high performance with minimal maintenance demands, while its solid-state design and built-in redundancies will support a long service life, mitigate service outages, and reduce operational costs for airlines.
- Simplified Upgrade Process: Existing Viasat customers upgrading to AERA will find the hardware engineered to simplify installation, requiring no structural changes to aircraft and minimizing downtime, while also reducing weight and drag, thus helping airlines capture operational efficiencies.
See More
Viasat Enters Boeing's Evaluation for Next-Gen Antenna
- Technical Evaluation Partnership: Viasat (VSAT) has entered Boeing's (BA) technical evaluation process to assess its next-generation electronically steered antenna terminal, AERA, across all current Boeing commercial airplane programs, indicating a deepening collaboration in aviation technology.
- System Certification and Options: Upon certification, Viasat AERA will be a selectable linefit option, enabling airlines to incorporate this innovative hardware directly into their aircraft configurations and future fleet planning, thereby enhancing connectivity and flexibility in airline services.
- Market Readiness Progress: At the Aircraft Interior Expo, Viasat showcased progress on the readiness of its AERA terminal for market entry planned for early 2028, highlighting innovative technologies and capabilities that will benefit both airlines and passengers.
- Strategic Milestone: Viasat's Vice President Brian Simone stated that this agreement continues the company's tradition of bringing powerful connectivity solutions to market, marking an important milestone in delivering Viasat AERA to airlines worldwide.
See More
Viasat Unveils Next-Gen AERA Antenna for Airlines
- Technical Evaluation Process: Viasat announced at the Aircraft Interior Expo that it has entered Boeing's technical evaluation process to assess its next-generation electronically steered antenna, AERA, aimed at enhancing airlines' connectivity capabilities in future fleet planning.
- Multibeam Technology Advantage: AERA's multibeam technology is designed to unlock unprecedented multi-orbit flexibility, ensuring stable connections across various geographies and flight conditions, thereby enhancing airline reliability and passenger Wi-Fi experience.
- Lightweight Design: AERA features a lightweight, low-profile solid-state design aimed at reducing maintenance demands and extending service life, which in turn minimizes aircraft downtime and lowers operational costs, enhancing overall efficiency.
- Software Update Capability: The terminal is built to evolve with software updates that enhance features, ensuring airlines can maintain competitiveness in their future connectivity strategies and adapt to emerging satellite networks and market demands.
See More
Analysis of Companies Trading Near 52-Week Highs
- Ryder's Underperformance: Despite a one-month return of 9.6%, Ryder's annual revenue growth of only 3.7% over the past two years falls short of industrial sector standards, indicating limitations in rapid growth, while flat earnings per share put it at a disadvantage compared to peers.
- Viasat's Growth Struggles: With an 18.2% one-month return, Viasat has seen its earnings per share decline by 2.6% annually due to new share issuances over the past five years, and its cash-burning tendencies raise concerns about sustainable shareholder value generation, reflecting failures in its growth strategies.
- California Resources' Strong Performance: California Resources boasts a one-month return of 7.1% and an impressive annual revenue growth of 16.9% over the past five years, indicating a significant increase in market share during this cycle, complemented by a gross margin of 57.1% and a free cash flow margin of 14.3%, providing various options for capital deployment.
- Market Trend Analysis: While current market attention on these stocks is rising, short-term trends do not always guarantee long-term success, prompting investors to carefully assess fundamentals to avoid losses from chasing short-term fluctuations.
See More
Barclays Upgrades Viasat to Equal-weight Amid Cash Flow Improvements
- Rating Upgrade: Barclays upgraded Viasat (VSAT) from Underweight to Equal-weight as the company approaches break-even free cash flow, indicating a positive shift in financial health.
- Satellite Launch Plans: The upcoming launch of a key satellite is expected to mitigate threats from new Low Earth Orbit (LEO) competitors, thereby enhancing Viasat's competitive position in the market.
- Defense Business Potential: Barclays analysts note that a potential sale of Viasat's defense business could add significant value, further enhancing the company's overall valuation.
- Stock Performance: Viasat shares rose 4% on Wednesday, reaching an all-time high, and have appreciated 63% since the beginning of the year, contrasting with a 1% decline in the S&P 500, reflecting strong market optimism about its future prospects.
See More
Amazon's Acquisition Talks with Globalstar Spark Satellite Stock Surge
- Acquisition Rumors Ignite Market: Amazon's rumored acquisition talks with Globalstar have led to a strong rally in satellite stocks, with Viasat's shares rising nearly 19%, reflecting bullish sentiment in the satellite sector.
- Increased Industry Concentration: If consummated, this deal would significantly enhance Amazon's competitive edge in the low-Earth orbit satellite internet market, further solidifying its position in the tech industry.
- Investor Interest Surges: Although Viasat was not mentioned in the report, the market perceives Amazon's interest in Globalstar as a signal of potential value across all satellite companies, drawing increased investor attention.
- Market Risk Advisory: Despite the strong short-term performance of satellite stocks, the complexities and potential hurdles of large-scale deals (such as Apple's stake in Globalstar) suggest that investors should approach the future of this sector with caution.
See More
Viasat Unveils Next-Gen Satellite Communication Terminal
- Technical Evaluation Process: Viasat announced at the Aircraft Interior Expo that it has entered Boeing's technical evaluation process to assess its next-generation electronically steered antenna terminal, AERA, across all current Boeing commercial airplane programs, marking a significant alignment with Boeing's future connectivity architecture.
- Market Launch Plan: Viasat AERA is set to enter the market in early 2028, utilizing simultaneous multibeam technology designed to unlock unprecedented multi-orbit flexibility, providing airlines with greater reliability and passengers with a smoother Wi-Fi experience, thereby enhancing overall customer satisfaction.
- Lightweight Design Advantages: The AERA terminal features a low-profile design that delivers high performance with minimal maintenance demands, while its solid-state design and built-in redundancies will support a long service life, mitigate service outages, and reduce operational costs for airlines.
- Simplified Upgrade Process: Existing Viasat customers upgrading to AERA will find the hardware engineered to simplify installation, requiring no structural changes to aircraft and minimizing downtime, while also reducing weight and drag, thus helping airlines capture operational efficiencies.
See More
Viasat Enters Boeing's Evaluation for Next-Gen Antenna
- Technical Evaluation Partnership: Viasat (VSAT) has entered Boeing's (BA) technical evaluation process to assess its next-generation electronically steered antenna terminal, AERA, across all current Boeing commercial airplane programs, indicating a deepening collaboration in aviation technology.
- System Certification and Options: Upon certification, Viasat AERA will be a selectable linefit option, enabling airlines to incorporate this innovative hardware directly into their aircraft configurations and future fleet planning, thereby enhancing connectivity and flexibility in airline services.
- Market Readiness Progress: At the Aircraft Interior Expo, Viasat showcased progress on the readiness of its AERA terminal for market entry planned for early 2028, highlighting innovative technologies and capabilities that will benefit both airlines and passengers.
- Strategic Milestone: Viasat's Vice President Brian Simone stated that this agreement continues the company's tradition of bringing powerful connectivity solutions to market, marking an important milestone in delivering Viasat AERA to airlines worldwide.
See More
Viasat Unveils Next-Gen AERA Antenna for Airlines
- Technical Evaluation Process: Viasat announced at the Aircraft Interior Expo that it has entered Boeing's technical evaluation process to assess its next-generation electronically steered antenna, AERA, aimed at enhancing airlines' connectivity capabilities in future fleet planning.
- Multibeam Technology Advantage: AERA's multibeam technology is designed to unlock unprecedented multi-orbit flexibility, ensuring stable connections across various geographies and flight conditions, thereby enhancing airline reliability and passenger Wi-Fi experience.
- Lightweight Design: AERA features a lightweight, low-profile solid-state design aimed at reducing maintenance demands and extending service life, which in turn minimizes aircraft downtime and lowers operational costs, enhancing overall efficiency.
- Software Update Capability: The terminal is built to evolve with software updates that enhance features, ensuring airlines can maintain competitiveness in their future connectivity strategies and adapt to emerging satellite networks and market demands.
See More
Analysis of Companies Trading Near 52-Week Highs
- Ryder's Underperformance: Despite a one-month return of 9.6%, Ryder's annual revenue growth of only 3.7% over the past two years falls short of industrial sector standards, indicating limitations in rapid growth, while flat earnings per share put it at a disadvantage compared to peers.
- Viasat's Growth Struggles: With an 18.2% one-month return, Viasat has seen its earnings per share decline by 2.6% annually due to new share issuances over the past five years, and its cash-burning tendencies raise concerns about sustainable shareholder value generation, reflecting failures in its growth strategies.
- California Resources' Strong Performance: California Resources boasts a one-month return of 7.1% and an impressive annual revenue growth of 16.9% over the past five years, indicating a significant increase in market share during this cycle, complemented by a gross margin of 57.1% and a free cash flow margin of 14.3%, providing various options for capital deployment.
- Market Trend Analysis: While current market attention on these stocks is rising, short-term trends do not always guarantee long-term success, prompting investors to carefully assess fundamentals to avoid losses from chasing short-term fluctuations.
See More
Barclays Upgrades Viasat to Equal-weight Amid Cash Flow Improvements
- Rating Upgrade: Barclays upgraded Viasat (VSAT) from Underweight to Equal-weight as the company approaches break-even free cash flow, indicating a positive shift in financial health.
- Satellite Launch Plans: The upcoming launch of a key satellite is expected to mitigate threats from new Low Earth Orbit (LEO) competitors, thereby enhancing Viasat's competitive position in the market.
- Defense Business Potential: Barclays analysts note that a potential sale of Viasat's defense business could add significant value, further enhancing the company's overall valuation.
- Stock Performance: Viasat shares rose 4% on Wednesday, reaching an all-time high, and have appreciated 63% since the beginning of the year, contrasting with a 1% decline in the S&P 500, reflecting strong market optimism about its future prospects.
See More
Amazon's Acquisition Talks with Globalstar Spark Satellite Stock Surge
- Acquisition Rumors Ignite Market: Amazon's rumored acquisition talks with Globalstar have led to a strong rally in satellite stocks, with Viasat's shares rising nearly 19%, reflecting bullish sentiment in the satellite sector.
- Increased Industry Concentration: If consummated, this deal would significantly enhance Amazon's competitive edge in the low-Earth orbit satellite internet market, further solidifying its position in the tech industry.
- Investor Interest Surges: Although Viasat was not mentioned in the report, the market perceives Amazon's interest in Globalstar as a signal of potential value across all satellite companies, drawing increased investor attention.
- Market Risk Advisory: Despite the strong short-term performance of satellite stocks, the complexities and potential hurdles of large-scale deals (such as Apple's stake in Globalstar) suggest that investors should approach the future of this sector with caution.
See More
