SGBAF - Viasat: Possible Value Trap With Many Risks Ahead (Rating Upgrade)

2024-01-24 06:17:18 ET

Summary

• Viasat has experienced a series of failures and setbacks, including delays in satellite launches and technological issues.
• Viasat has become an incumbent telco/satellite following its Inmarsat acquisition.
• Viasat's mature, lower growth status should put it in line with its industry peers and not command a premium valuation.
• Viasat's recent satellite failure places high risk on the company for the near future, primarily from competition and the launch outcomes of their remaining 3rd-generation satellites.

It boggles my mind that Viasat ( VSAT ) has had such a prominent shareholder base for the longest time. I last wrote about VSAT and SES S.A. ( SGBAF ) together in January 2023. That was a pair trade for me: Short VSAT and Long SES S.A. Since then, I have covered my short on VSAT, which had a monumental collapse in price under $20 following one disaster after another.

The price for VSAT is now tamer and I merely consider VSAT a Hold....

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