VIASAT INC (VSAT): what the price assumes

In the published model solve dated 2026-Q2, anchored at $81.12, VIASAT INC (VSAT) is priced for today's economics sustained for ~20.4 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-28.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/VSAT

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 7: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 10.1% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2.8 years.

How unusual the bet is: elevated

Valuation X-Ray

The price is supported by earnings-power value, while asset-based lands below the price. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Earnings Families that call it expensive: Asset

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.3%); the inversion above states its own rate.

Per-Model Detail (n=4)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• Viasat runs two businesses under one ticker, a satellite communications arm and a defense and advanced technologies arm; the 10-K reports it "in two separate segments consisting of communication services and defense and advanced technologies."
• The defining risk is the balance sheet: net debt sits near $4.7 billion against trailing operating income that barely clears interest, and the share count has grown at a double-digit pace, so equity holders sit behind a large creditor stack.
• What to watch is whether the defense backlog and the cash flow keep climbing while ViaSat-3 capacity comes online; management points to roughly $180 million of free cash flow for the coming year and slightly lower leverage.

Bull Case

What defines Viasat as a business is hard to replicate: it owns satellites in orbit and the spectrum rights to use them, assets that take years and billions to build and cannot be conjured by a competitor overnight. The 10-K frames the proposition as giving "customers with the essential capacity density, market access, speed, bandwidth and responsiveness they need," backed by "advanced multi-orbit resource management techniques to reduce costs and expand geographic coverage." That is a real infrastructure moat, even if the equity market treats the company as a troubled small cap.

The better half of the company is the defense and advanced technologies segment. Where the consumer broadband business is under pressure, defense is growing, and the order book tells the story: the 10-K describes a backlog split into "funded and unfunded components," and recent results show record new awards near $4.93 billion against a backlog around $4.07 billion, with the segment growing at a double-digit clip on cybersecurity, secure communications, and space systems work. Government and military customers are sticky, contracts are long, and the spending tailwind behind secure communications is durable. This is the part of Viasat that looks least like a melting ice cube.

The cash flow is the quiet bull point. Despite the GAAP losses, Viasat generates substantial free cash flow, and management is using it plus asset sales to pay down debt. Net debt has been falling and the leverage ratio improving toward roughly three times EBITDA. The price is supported by the earnings-power and cash-flow methods rather than asset value: the cash-flow lens, capitalizing free cash flow with no growth, lands well above the current price. For a holder, the bet is that the defense engine and the maturing satellite fleet generate enough cash to deleverage the balance sheet, at which point the equity captures the value that today flows mostly to bondholders.

Bear Case

The capital structure is the whole bear case, and it is not subtle. Viasat carries net debt of roughly $4.7 billion against gross debt above $6.4 billion, and trailing operating income covers interest barely, if at all. A company this leveraged has almost no margin for error: a single missed satellite launch, a refinancing window that closes, or a step down in a key contract can move the equity sharply because the creditors are paid first and the equity is the thin residual on top of a large debt tower. The 10-K is dense with the machinery of that debt, describing the establishment of the "$1.3 billion 2024 Inmarsat Term Loan Facility, the proceeds of which, together with cash on hand, were used to repay approximately $1.38 billion of the outstanding borrowings under the Original Inmarsat Term Loan Facility." That is a company refinancing one large loan with another, the treadmill leveraged businesses run on.

The operating side has a structural problem the bull case has to talk past: Starlink. Low-earth-orbit constellations have changed the economics of satellite broadband, and Viasat's residential fixed business is in decline as a result, with competitive pressure now reaching into the higher-margin aviation connectivity market. The newest capacity is meant to answer that, but it arrives into a market where the competitor already has thousands of satellites and a lower cost-per-bit. Until the new fleet is fully in service, the consumer side is shrinking, not growing.

Dilution compounds the leverage. The share count has grown at a double-digit pace, so even as the company deleverages, each existing holder owns a smaller slice. The price already reflects a long recovery: at the current level the market is paying about 107 times trailing operating income, a multiple that only makes sense if profitability inflects sharply from a depressed base. The asset-value methods, which look at book value rather than hoped-for cash flow, land well below the price. If deleveraging stalls or the satellite ramp slips, there is no growth-method floor to catch the equity, only the cash flow the bondholders have first claim on.

Valuation

Viasat is the rare case where the price is supported by cash flow and earnings power rather than by growth. At $64 (June 28, 2026) the market pays about 107 times trailing operating income, which sounds extreme until you remember that operating income is depressed against a heavily indebted, high-capital business. The inversion reads it as company-wide operating growth held near its self-funding ceiling for about sixteen years, a demanding bet, but the more honest frame is that current profit is at a cyclical low and the cash flow tells a different story.

The methods that apply split sharply. The growth-projection methods are switched off entirely; with sustained net losses, negative retained earnings, and distress signals, projecting cash flows forward would be guesswork, so the engine declines to do it. What remains is the cash-flow and asset lenses. The free-cash-flow method, capitalizing Viasat's substantial cash generation with no growth, lands well above the price, which is why earnings-power supports the valuation. The asset-value methods, anchored on book value per share near $33, land below the price, which is why the asset frame calls it expensive. The price sits between them: above what the balance sheet alone is worth, below what the cash flow capitalizes to. That gap is the deleveraging bet.

Solvency is where this report has to be blunt. Net debt of roughly $4.7 billion, interest coverage that barely clears, and a share count growing at a double-digit pace make this a balance-sheet story first and an operating story second. The cash flow funds the debt paydown, and recent results show net leverage easing toward three times EBITDA, but the equity is a thin claim behind a large creditor stack. The peer set the cohort assigns here does not fit a satellite operator, so the cleaner comparison is the company against its own debt schedule and its own cash generation, not against an unrelated group.

Catalysts

Viasat's fiscal 2026 results sharpened the deleveraging story. The company reported full-year revenue around $4.6 billion with a GAAP net loss near $34 million and adjusted EBITDA of about $1.55 billion, and generated roughly $177 million of free cash flow excluding a $420 million lump-sum payment from Ligado. Net debt fell to about $4.84 billion with liquidity near $2.9 billion, and the net-debt-to-adjusted-EBITDA ratio improved to roughly 3.1 times, the clearest evidence the cash flow is going where it needs to.

The segment split is the watch item. Defense and advanced technologies revenue grew about 12% to roughly $361 million on cybersecurity and space-systems demand, with record new awards near $4.93 billion and backlog around $4.07 billion, while communication services revenue slipped about 2% as residential fixed broadband declined against Starlink competition. Management guided to mid-single-digit revenue growth and flat-to-slightly-higher adjusted EBITDA for fiscal 2027, with free cash flow of roughly $180 million and slightly lower net leverage, and flagged that competition is expected to slow aviation-services growth until new satellite capacity enters service. The order of operations matters: defense and cash flow are the upside, the satellite ramp and Starlink are the overhang.

Peer Cohorts (Per Segment, With Filing Citations)

Communication services (reported)

• GSAT (GLOBALSTAR, INC.)
• FY2025 10-K: …of certain licensing, service and related criteria. We retain 15% of our current and future network capacity to support our other customers, including our existing and future Commercial IoT, SPOT and Duplex subscribers. We believe that this capacity can support a substantial increase in our own subscriber base. This…
• FY2025 10-K: …spectrum sharing agreements, or revocation, modification or non-renewal of necessary licenses, the opportunities for strategic business transactions and the effects of consolidation in our industry on us and our competitors, business interruptions due to natural disasters and unexpected events, volatility in the…
• IRDM (Iridium Communications Inc.)
• FY2025 10-K: …in demand for mobile satellite services is driven in large part by the declining cost of these services, the diminishing size and lower costs of voice, data and IoT devices, the rollout of new applications tailored to the specific needs of customers across a variety of markets, the convergence of standards between…
• FY2025 10-K: …such as FEMA, and other agencies, such as the Department of Homeland Security, use our products and services in their emergency response plans, particularly in the aftermath of natural disasters. These agencies generate significant demand for both our voice and data products, especially in advance of the hurricane…
• ASTS (AST SpaceMobile, Inc.)
• FY2025 10-K: …telecommunications industry, including terrestrial and satellite-based network systems. The mobile satellite services industry at-large is highly competitive, and we face substantial general competition from other service providers that offer a range of mobile and fixed communications options. There are also a number…
• FY2025 10-K: …and other satellite operators, and from the extension of land-based communications services or new technologies. We may face increased competition from new competitors, new technologies or new equipment, including new LEO constellations and expansion of existing geostationary satellite systems, new technology that…
• SATS (EchoStar Corporation)
• FY2025 10-K: …technologies, managed services, equipment, hardware, satellite services and communications solutions to government and enterprise customers. We have leveraged the EchoStar XXIV satellite to deliver satellite services to unserved and underserved consumer markets in the Americas as well as enterprise, aeronautical and…
• FY2025 10-K: …products and services to consumer customers, which include home and small to medium-sized businesses. We provide broadband network technologies, managed services, equipment, hardware, satellite services and communications solutions to government and enterprise customers. We have leveraged the EchoStar XXIV satellite…

Defense and advanced technologies (reported)

• KTOS (Kratos Defense & Security Solutions, Inc.)
• FY2025 10-K: …property and past performance qualifications and by offering a wider range of comprehensive low-cost technology leading and proven products and solutions compared to our competitors. In regard to areas of specialization, our product and solution offerings include the manufacturing of specialized defense electronics;…
• FY2025 10-K: …the U.S. Air Force (USAF), the U.S. Navy (USN), the U.S. Army, the U.S. Marine Corps (USMC), the U.S. Space Force, and the U.S. Space Command, and others. Additionally, Kratos customers also include the Defense Innovation Unit ("DIU") (formerly the Defense Innovation Unit Experimental ("DIUx")), Defense Advanced…
• MRCY (MERCURY SYSTEMS, INC.)
• FY2025 10-K: …product, where the customer evaluates alternative technologies and design approaches. We work with defense prime contractors as well as directly with the DoD. We help drive subsystem development and deployment in both classified and unclassified environments. The principal competitive factors in our market are…
• FY2025 10-K: …by the growing demand for domestically designed, sourced and manufactured electronics for critical aerospace, defense and intelligence applications. Our primary market positioning is centered on making commercially available technologies profoundly more accessible to the aerospace and defense sector, specifically as…
• LHX (L3HARRIS TECHNOLOGIES, INC.)
• FY2025 10-K: …Demand We operate in highly-competitive markets that are sensitive to technological advances. Some of our competitors in each of our markets are larger than we are and can maintain higher levels of expenditures for research and development ("R&D"). We concentrate on the opportunities that we believe are compatible…
• FY2025 10-K: . We are highly dependent on revenue from U.S. Government customers, primarily defense-related programs with the DoW and other government agencies. The market for sales to U.S. Government customers is highly competitive and the U.S. Government may choose to use other contractors as part of competitive bidding…
• DRS (Leonardo DRS, Inc.)
• FY2025 10-K: …and power generation and management are central to these priorities. Demand for our technologies is concentrated in areas of sustained priority for the DoW, including counter‑unmanned aircraft systems ("C-UAS"), advanced infrared sensing, network computing, and electric power and propulsion for next generation navy…
• FY2025 10-K: …ship propulsion systems, motors and variable frequency drives, force protection systems, and transportation and logistics systems for the U.S. military and allied defense customers. DRS is a leading provider of next-generation electrical propulsion systems for the U.S. Navy. We provide power conversion, control,…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.