The firm said it lowered its rating on the provider of high speed fixed and mobile broadband services, advanced satellite, and other networking systems, as its consumer broadband business is falling short of expectations.
Oppenheimer removed its $62 price target from the stock.
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"We rate VIASAT INC (VSAT) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
Separately, TheStreet Ratings team rates VIASAT INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
- 40.48% is the gross profit margin for VIASAT INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -1.86% is in-line with the industry average.
- VIASAT INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VIASAT INC continued to lose money by earning -$0.21 versus -$0.94 in the prior year. This year, the market expects an improvement in earnings ($1.11 versus -$0.21).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 2.2%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The share price of VIASAT INC has not done very well: it is down 14.91% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Communications Equipment industry. The net income has significantly decreased by 224.1% when compared to the same quarter one year ago, falling from -$1.83 million to -$5.94 million.
- You can view the full analysis from the report here: VSAT Ratings Report