Why ViaSat Stock Popped on Monday
Key PointsWilliam Blair analyst Louie DiPalma upgraded ViaSat stock to "outperform" today.
DiPalma thinks a spinoff and a big cash infusion could turn ViaSat stock free-cash-flow-positive sooner than expected.
And he thinks the stock will double in a year.
- 10 stocks we like better than Viasat ›
William Blair analyst Louie DiPalma upgraded ViaSat stock to "outperform" today.
DiPalma thinks a spinoff and a big cash infusion could turn ViaSat stock free-cash-flow-positive sooner than expected.
And he thinks the stock will double in a year.
ViaSat (NASDAQ: VSAT) soared 24% through 1 p.m. ET Monday after William Blair analyst Louie DiPalma upgraded the satellite communications stock to "outperform" and predicted ViaSat shares could more than double over the next 12 months.
Image created by JesterAI.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
What Blair said about ViaSat
DiPalma took a sum-of-the-parts approach to arrive at his new valuation for ViaSat, which provides both commercial broadband and narrowband communications services and also has a defense and advanced technologies division providing equipment and services to the government and military.
The analyst pointed out in a note covered on TheFly.com that ViaSat is considering spinning off or IPO'ing its defense technology business, which according to data from S&P Global Market Intelligence accounts for about 27% of ViaSat's revenue -- and all of the company's profits.
That would appear to imply there won't be much left worth owning to ViaSat after such an IPO. But according to DiPalma, the company is actually on track to turn free-cash-flow-positive later this year and in line to receive a $568 million payment in 2026. After it pays for and launches its final two ViaSat-3 satellites, positive free cash flow (FCF) is more likely. And that catalyst, combined with the IPO, could double ViaSat's stock price in a year.
Is ViaSat stock a buy?
My worry is that this prediction sounds a bit too "pie in the sky."
On the one hand, yes, building and launching satellites is expensive, and it's a well-known drain on FCF for many satellite stocks. Completing its constellation might turn ViaSat FCF-positive. But ViaSat hasn't generated positive free cash flow in more than a decade -- since 2008, in fact -- and most other analysts think it will be 2027 before the company starts generating cash again.
Based on its history, I still consider ViaSat stock a sell.
Should you invest $1,000 in Viasat right now?
Before you buy stock in Viasat, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Viasat wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $624,823!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,064,820!*
Now, it’s worth noting Stock Advisor’s total average return is 1,019% — a market-crushing outperformance compared to 178% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
*Stock Advisor returns as of August 4, 2025
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
