Viasat Inc Stock Downgraded (VSAT)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- Viasat (Nasdaq: VSAT) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 14.8%. Since the same quarter one year prior, revenues rose by 28.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 123.52% and other important driving factors, this stock has surged by 73.47% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although VSAT had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • VIASAT INC reported significant earnings per share improvement in the most recent quarter compared to 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 swung to a loss, reporting -$0.94 versus $0.17 in the prior year. This year, the market expects an improvement in earnings ($0.81 versus -$0.94).
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Communications Equipment industry and the overall market, VIASAT INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $42.66 million or 44.22% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

ViaSat, Inc. provides fixed and mobile broadband services, and satellite and wireless networks, as well as secure networking systems, products, and services for government and commercial customers worldwide. Viasat has a market cap of $3.06 billion and is part of the technology sector and telecommunications industry. Shares are up 74.9% year to date as of the close of trading on Friday.

You can view the full Viasat Ratings Report or get investment ideas from our investment research center.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more..

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

More from Markets

Canopy Growth Lets Down Eager Pot Investors; PayPal Keeps Dominating -- ICYMI

Canopy Growth Lets Down Eager Pot Investors; PayPal Keeps Dominating -- ICYMI

Dow, S&P 500 and Nasdaq Tumble After Trump Calls Off North Korea Summit

Dow, S&P 500 and Nasdaq Tumble After Trump Calls Off North Korea Summit

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

3 Must Reads on the Market From TheStreet's Top Columnists

3 Must Reads on the Market From TheStreet's Top Columnists

Automakers Slump as Trump Tariffs Threaten Both Manufacturers and Consumers

Automakers Slump as Trump Tariffs Threaten Both Manufacturers and Consumers