Satellite communications company ViaSat (VSAT +1.19%) stock tumbled 4.5% through 2 p.m. ET Wednesday after reporting mixed earnings last night.
As TheFly.com reports, ViaSat's fiscal Q1 2027 earnings of $0.17 per share (non-GAAP) were nearly twice the $0.09 per share that analysts expected; however, the company's revenue fell just short of the predicted $1.2 billion.
Image source: Getty Images.
ViaSat Q1 earnings by the numbers
Despite the apparent earnings beat, however, not all ViaSat's news was good. Earnings calculated under generally accepted accounting principles (GAAP) were negative $52 million -- better than last year's $56 million loss, but still a loss. Sales declined 1% year over year at ViaSat, with communications services revenue flat and defense revenue declining 4%.
But not all the news was bad either. Free cash flow at ViaSat, for example, was positive despite the GAAP loss, with ViaSat generating cash profits of $72 million, a 19% year-over-year increase. ViaSat also took in $1.3 billion in new orders during the quarter, more than it recorded as sales going out the door -- and resulting in a positive book-to-bill ratio of 1.08 that implies sales growth will resume in the near future.
NASDAQ: VSAT
Key Data Points
What's next for ViaSat stock?
ViaSat noted that over the last 12 months, its total free cash flow generated is $189 million, so the jump to $72 million is significant. Still, even assuming ViaSat can maintain this level of quarterly cash generation going forward, at its current $11.1 billion market capitalization, ViaSat stock trades at nearly 59 times FCF -- and that's before accounting for its $5.2 billion in net debt. Counting that, the company's enterprise value would be closer to 86 times FCF, which seems expensive to me.
At this price, I fear ViaSat stock looks more like a sell than a buy.
Yesterday, 4:26 PM
Reports Q1 revenue $1.16B, consensus $1.2B.
