Shareholders of Viasat, Inc. (NASDAQ:VSAT) will be pleased this week, given that the stock price is up 14% to US$38.57 following its latest first-quarter results. Revenues of US$678m came in 3.7% below estimates, but statutory losses were well contained with a per-share loss of US$0.29 being some 17% smaller than what the analysts were predicting. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, Viasat's seven analysts are now forecasting revenues of US$3.07b in 2023. This would be a meaningful 9.6% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Viasat forecast to report a statutory profit of US$0.042 per share. Before this earnings announcement, the analysts had been modelling revenues of US$3.10b and losses of US$0.30 per share in 2023. Although we saw no serious change to the revenue outlook, the analysts have definitely increased their earnings estimates, estimating a profit next year, compared to previous forecasts of a loss. So it seems like the consensus has become substantially more bullish on Viasat.
The consensus price target was unchanged at US$53.33, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Viasat at US$85.00 per share, while the most bearish prices it at US$34.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Viasat's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Viasat'shistorical trends, as the 13% annualised revenue growth to the end of 2023 is roughly in line with the 12% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.5% annually. So it's pretty clear that Viasat is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts now expect Viasat to become profitable next year, compared to previous expectations that it would report a loss. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$53.33, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Viasat going out to 2025, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Viasat (at least 1 which is potentially serious) , and understanding these should be part of your investment process.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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