Viasat Sinks 17% Despite Upbeat Q2 Results

Communications company Viasat Inc. (VSAT) has reported stronger-than-expected results for the fiscal second quarter ended September 30, 2021.

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Despite the upbeat results, shares of the company declined 16.9% on Monday. The stock, however, pared its losses slightly to close at $56 in the extended trade.

Revenue & Earnings

Viasat reported quarterly revenues of $701.4 million, up 26.5% from the same quarter last year. Moreover, the figure surpassed the consensus estimate of $681.25 million. A year-over-year rise of 31.6% and 20.6% witnessed in Service revenues and Product revenues, respectively, drove the overall growth in total revenues.

The company’s earnings for the quarter stood at $0.34 per share, up 9.7% year-over-year. Further, the figure comfortably outpaced the consensus estimate of $0.07 per share.

Other Operating Metrics

In other operating metrics, VSAT’s operating income stood at $8.3 million for the quarter, a decline of 34.6% from the same quarter last year.

However, the company’s adjusted EBITDA witnessed a year-over-year growth of 19.2% to $155 million.

While the company’s net debt witnessed a year-over-over rise of 27.7%, its net debt leverage ratio remained flat at 3.2.

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Price Target

Recently, Morgan Stanley analyst Simon Flannery reiterated a Hold rating on the stock. The analyst, however, raised the price target to $70 from $45, which implies upside potential of 25.8% from current levels.

The Wall Street community is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 2 Buys and 2 Holds. The average Viasat price target of $70.75 implies that the stock has upside potential of 27.1% from current levels. Shares have gained about 53.3% over the past year.