We came across a bullish thesis on Viasat, Inc. (VSAT) on wallstreetbets Subreddit page by Gskinny. In this article, we will summarize the bulls’ thesis on VSAT. Viasat, Inc. (VSAT)’s share was trading at $10.17 as of Nov 4th.
Copyright: lexaarts / 123RF Stock Photo
Viasat’s stock has plummeted 65% year-to-date and currently has a 15% short float, trading at its lowest price since 2003. This substantial decline positions the stock as a potentially lucrative speculative play. Viasat is a key player in providing satellite internet, enabling connectivity for commercial airlines and military operations in remote locations. Major airlines like American, Delta, United, and Emirates, along with various military clients, rely on Viasat’s technology to deliver internet service in challenging environments, such as mid-air over oceans or in war-torn regions.
As a geostationary (GEO) satellite company, Viasat faces intense competition from Starlink. The acquisition of Inmarsat, which boasts a European satellite fleet, was a significant move for Viasat in 2023, albeit a costly one. While Viasat has seen revenue growth following the acquisition, it struggles with increased costs and technical challenges that have hindered its profitability compared to Starlink. The launch of the Viasat 3 constellation, which consists of three satellites aimed at achieving global coverage, is anticipated to enhance Viasat’s service capabilities. The Europe and Asia satellites are expected to launch in 2025, with Inmarsat recently deploying two satellites in the Arctic, targeting government and military customers.
Despite the current financial difficulties, the Inmarsat acquisition could unlock substantial future potential, positioning Viasat as a comprehensive provider of high-speed satellite connectivity. Viasat’s unique advantage lies in its ability to operate across multiple orbital levels, catering to a diverse range of commercial and governmental needs, which may enhance its competitive edge against Starlink.
With earnings set to be announced after market close on Wednesday, there is optimism surrounding possible positive updates related to the Viasat 3 project and Inmarsat’s satellite operations. Given the high short float and the dramatic stock decline throughout the year, this creates a compelling scenario for those looking to capitalize on potential reversals in market sentiment. Investors may find this moment an opportune time to explore Viasat as a high-risk, high-reward opportunity, particularly as sentiment shifts could lead to significant upside if earnings results exceed expectations.
Viasat, Inc. (VSAT) is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held VSAT at the end of the second quarter which was 21 in the previous quarter. While we acknowledge the risk and potential of VSAT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than VSAT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article was originally published at Insider Monkey.