Intrinsic value of ViaSat - VSAT

Previous Close

$69.19

  Intrinsic Value

$7.56

stock screener

  Rating & Target

str. sell

-89%

Previous close

$69.19

 
Intrinsic value

$7.56

 
Up/down potential

-89%

 
Rating

str. sell

We calculate the intrinsic value of VSAT stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 3.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  10.00
  9.50
  9.05
  8.64
  8.28
  7.95
  7.66
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
  6.27
  6.14
  6.03
  5.93
  5.83
  5.75
  5.68
  5.61
  5.55
  5.49
  5.44
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
Revenue, $m
  1,715
  1,878
  2,048
  2,225
  2,409
  2,601
  2,800
  3,007
  3,222
  3,445
  3,678
  3,919
  4,170
  4,432
  4,704
  4,988
  5,283
  5,592
  5,913
  6,249
  6,599
  6,965
  7,348
  7,748
  8,166
  8,604
  9,062
  9,541
  10,043
  10,569
Variable operating expenses, $m
  1,664
  1,820
  1,983
  2,153
  2,330
  2,514
  2,706
  2,904
  3,111
  3,326
  3,533
  3,765
  4,006
  4,257
  4,519
  4,791
  5,075
  5,371
  5,680
  6,003
  6,339
  6,691
  7,058
  7,443
  7,844
  8,265
  8,705
  9,165
  9,648
  10,153
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  1,664
  1,820
  1,983
  2,153
  2,330
  2,514
  2,706
  2,904
  3,111
  3,326
  3,533
  3,765
  4,006
  4,257
  4,519
  4,791
  5,075
  5,371
  5,680
  6,003
  6,339
  6,691
  7,058
  7,443
  7,844
  8,265
  8,705
  9,165
  9,648
  10,153
Operating income, $m
  51
  58
  64
  71
  79
  86
  94
  102
  111
  120
  145
  154
  164
  175
  185
  196
  208
  220
  233
  246
  260
  274
  289
  305
  322
  339
  357
  376
  396
  416
EBITDA, $m
  252
  275
  300
  326
  353
  381
  411
  441
  473
  505
  539
  575
  612
  650
  690
  732
  775
  820
  867
  917
  968
  1,022
  1,078
  1,137
  1,198
  1,262
  1,329
  1,400
  1,473
  1,550
Interest expense (income), $m
  10
  46
  52
  59
  66
  74
  82
  90
  98
  107
  116
  125
  135
  146
  156
  167
  179
  191
  203
  216
  230
  244
  259
  274
  290
  307
  325
  343
  363
  383
  404
Earnings before tax, $m
  6
  5
  5
  5
  5
  5
  4
  4
  4
  3
  19
  19
  19
  18
  18
  18
  17
  17
  17
  16
  16
  16
  15
  15
  14
  14
  14
  13
  13
  12
Tax expense, $m
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  5
  5
  5
  5
  5
  5
  5
  5
  5
  4
  4
  4
  4
  4
  4
  4
  4
  4
  3
  3
Net income, $m
  4
  4
  4
  4
  3
  3
  3
  3
  3
  3
  14
  14
  14
  13
  13
  13
  13
  13
  12
  12
  12
  11
  11
  11
  11
  10
  10
  10
  9
  9

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  3,248
  3,556
  3,878
  4,214
  4,563
  4,925
  5,302
  5,694
  6,102
  6,525
  6,965
  7,423
  7,898
  8,394
  8,909
  9,447
  10,007
  10,590
  11,199
  11,835
  12,499
  13,192
  13,916
  14,674
  15,466
  16,295
  17,162
  18,070
  19,021
  20,017
Adjusted assets (=assets-cash), $m
  3,248
  3,556
  3,878
  4,214
  4,563
  4,925
  5,302
  5,694
  6,102
  6,525
  6,965
  7,423
  7,898
  8,394
  8,909
  9,447
  10,007
  10,590
  11,199
  11,835
  12,499
  13,192
  13,916
  14,674
  15,466
  16,295
  17,162
  18,070
  19,021
  20,017
Revenue / Adjusted assets
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
Average production assets, $m
  1,840
  2,015
  2,197
  2,387
  2,585
  2,790
  3,004
  3,226
  3,457
  3,697
  3,946
  4,205
  4,475
  4,755
  5,048
  5,352
  5,669
  6,000
  6,345
  6,705
  7,081
  7,474
  7,884
  8,313
  8,762
  9,232
  9,723
  10,238
  10,776
  11,341
Working capital, $m
  69
  75
  82
  89
  96
  104
  112
  120
  129
  138
  147
  157
  167
  177
  188
  200
  211
  224
  237
  250
  264
  279
  294
  310
  327
  344
  362
  382
  402
  423
Total debt, $m
  971
  1,098
  1,231
  1,369
  1,513
  1,663
  1,819
  1,981
  2,149
  2,324
  2,506
  2,695
  2,891
  3,096
  3,309
  3,531
  3,762
  4,003
  4,254
  4,517
  4,791
  5,077
  5,377
  5,689
  6,017
  6,359
  6,717
  7,092
  7,485
  7,896
Total liabilities, $m
  1,341
  1,469
  1,602
  1,740
  1,884
  2,034
  2,190
  2,352
  2,520
  2,695
  2,877
  3,066
  3,262
  3,467
  3,680
  3,901
  4,133
  4,374
  4,625
  4,888
  5,162
  5,448
  5,747
  6,060
  6,388
  6,730
  7,088
  7,463
  7,856
  8,267
Total equity, $m
  1,907
  2,088
  2,277
  2,473
  2,678
  2,891
  3,113
  3,343
  3,582
  3,830
  4,088
  4,357
  4,636
  4,927
  5,230
  5,545
  5,874
  6,217
  6,574
  6,947
  7,337
  7,744
  8,169
  8,614
  9,079
  9,565
  10,074
  10,607
  11,165
  11,750
Total liabilities and equity, $m
  3,248
  3,557
  3,879
  4,213
  4,562
  4,925
  5,303
  5,695
  6,102
  6,525
  6,965
  7,423
  7,898
  8,394
  8,910
  9,446
  10,007
  10,591
  11,199
  11,835
  12,499
  13,192
  13,916
  14,674
  15,467
  16,295
  17,162
  18,070
  19,021
  20,017
Debt-to-equity ratio
  0.510
  0.530
  0.540
  0.550
  0.570
  0.580
  0.580
  0.590
  0.600
  0.610
  0.610
  0.620
  0.620
  0.630
  0.630
  0.640
  0.640
  0.640
  0.650
  0.650
  0.650
  0.660
  0.660
  0.660
  0.660
  0.660
  0.670
  0.670
  0.670
  0.670
Adjusted equity ratio
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587
  0.587

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  4
  4
  4
  4
  3
  3
  3
  3
  3
  3
  14
  14
  14
  13
  13
  13
  13
  13
  12
  12
  12
  11
  11
  11
  11
  10
  10
  10
  9
  9
Depreciation, amort., depletion, $m
  200
  218
  236
  255
  275
  295
  317
  339
  362
  386
  395
  421
  447
  476
  505
  535
  567
  600
  634
  670
  708
  747
  788
  831
  876
  923
  972
  1,024
  1,078
  1,134
Funds from operations, $m
  204
  222
  240
  259
  278
  299
  320
  342
  365
  388
  409
  434
  461
  489
  518
  548
  580
  612
  647
  682
  720
  759
  800
  842
  887
  933
  982
  1,033
  1,087
  1,143
Change in working capital, $m
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  17
  18
  18
  19
  20
  21
Cash from operations, $m
  198
  215
  233
  251
  271
  291
  312
  333
  356
  379
  399
  425
  451
  479
  507
  537
  568
  600
  634
  669
  706
  744
  784
  826
  870
  916
  964
  1,014
  1,067
  1,122
Maintenance CAPEX, $m
  -167
  -184
  -201
  -220
  -239
  -258
  -279
  -300
  -323
  -346
  -370
  -395
  -421
  -447
  -476
  -505
  -535
  -567
  -600
  -634
  -670
  -708
  -747
  -788
  -831
  -876
  -923
  -972
  -1,024
  -1,078
New CAPEX, $m
  -167
  -175
  -182
  -190
  -198
  -206
  -214
  -222
  -231
  -240
  -249
  -259
  -270
  -281
  -292
  -304
  -317
  -331
  -345
  -360
  -376
  -393
  -410
  -429
  -449
  -470
  -491
  -514
  -539
  -564
Cash from investing activities, $m
  -334
  -359
  -383
  -410
  -437
  -464
  -493
  -522
  -554
  -586
  -619
  -654
  -691
  -728
  -768
  -809
  -852
  -898
  -945
  -994
  -1,046
  -1,101
  -1,157
  -1,217
  -1,280
  -1,346
  -1,414
  -1,486
  -1,563
  -1,642
Free cash flow, $m
  -136
  -144
  -151
  -158
  -166
  -173
  -181
  -189
  -197
  -206
  -220
  -229
  -239
  -250
  -261
  -272
  -285
  -297
  -311
  -326
  -341
  -357
  -374
  -391
  -410
  -430
  -451
  -473
  -496
  -520
Issuance/(repayment) of debt, $m
  122
  127
  133
  138
  144
  150
  156
  162
  168
  175
  182
  189
  197
  205
  213
  222
  231
  241
  252
  263
  274
  286
  299
  313
  327
  342
  358
  375
  393
  411
Issuance/(repurchase) of shares, $m
  167
  177
  185
  193
  201
  210
  218
  227
  236
  246
  244
  255
  266
  277
  289
  302
  316
  330
  345
  361
  378
  396
  414
  434
  454
  476
  499
  523
  549
  576
Cash from financing (excl. dividends), $m  
  289
  304
  318
  331
  345
  360
  374
  389
  404
  421
  426
  444
  463
  482
  502
  524
  547
  571
  597
  624
  652
  682
  713
  747
  781
  818
  857
  898
  942
  987
Total cash flow (excl. dividends), $m
  153
  161
  167
  173
  180
  186
  193
  200
  207
  215
  206
  215
  223
  232
  242
  252
  263
  274
  286
  298
  311
  325
  340
  355
  372
  389
  407
  426
  446
  467
Retained Cash Flow (-), $m
  -172
  -181
  -189
  -197
  -205
  -213
  -221
  -230
  -239
  -248
  -258
  -269
  -279
  -291
  -303
  -315
  -329
  -343
  -357
  -373
  -390
  -407
  -425
  -445
  -465
  -487
  -509
  -533
  -558
  -585
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  56
  62
  68
  74
  80
  87
  94
  101
  108
  116
  124
  132
  141
  150
  160
  169
  180
  190
  201
  213
  225
  238
  251
  265
  279
  294
  310
  326
  343
  362
Cash available for distribution, $m
  -19
  -20
  -22
  -23
  -25
  -27
  -28
  -30
  -32
  -34
  -52
  -54
  -56
  -58
  -61
  -63
  -66
  -69
  -72
  -75
  -78
  -82
  -86
  -89
  -93
  -98
  -102
  -107
  -112
  -118
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  -18
  -19
  -19
  -19
  -19
  -19
  -19
  -19
  -18
  -18
  -25
  -23
  -21
  -20
  -18
  -16
  -14
  -13
  -11
  -10
  -8
  -7
  -6
  -5
  -4
  -3
  -2
  -2
  -1
  -1
Current shareholders' claim on cash, %
  95.6
  91.5
  87.7
  84.3
  81.1
  78.1
  75.4
  72.8
  70.4
  68.2
  66.1
  64.2
  62.4
  60.6
  58.9
  57.3
  55.8
  54.3
  52.9
  51.6
  50.2
  49.0
  47.7
  46.5
  45.4
  44.3
  43.2
  42.1
  41.1
  40.1

ViaSat, Inc. is engaged in broadband technologies and services. The Company operates through three segments: satellite services, commercial networks and government systems. The satellite services segment provides satellite-based broadband services to consumers, enterprises, commercial airlines and mobile broadband customers primarily in the United States. The commercial networks segment develops and produces a range of end-to-end satellite and wireless communication systems, ground networking equipment and space-to-earth connectivity systems. The government systems segment develops and produces network-centric Internet Protocol (IP)-based fixed and mobile secure government communications systems, products, services and solutions, which are designed to enable the collection and dissemination of real-time digital information between command centers, communications nodes and air defense systems.

FINANCIAL RATIOS  of  ViaSat (VSAT)

Valuation Ratios
P/E Ratio 166.1
Price to Sales 2.6
Price to Book 2.3
Price to Tangible Book
Price to Cash Flow 9.7
Price to Free Cash Flow -22.8
Growth Rates
Sales Growth Rate 10%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 29.9%
Cap. Spend. - 3 Yr. Gr. Rate 10.7%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 48.9%
Total Debt to Equity 48.9%
Interest Coverage 4
Management Effectiveness
Return On Assets 1.2%
Ret/ On Assets - 3 Yr. Avg. 2.1%
Return On Total Capital 1%
Ret/ On T. Cap. - 3 Yr. Avg. 1.5%
Return On Equity 1.7%
Return On Equity - 3 Yr. Avg. 2.6%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 32.7%
Gross Margin - 3 Yr. Avg. 31.2%
EBITDA Margin 18%
EBITDA Margin - 3 Yr. Avg. 20%
Operating Margin 2.3%
Oper. Margin - 3 Yr. Avg. 3.8%
Pre-Tax Margin 1.6%
Pre-Tax Margin - 3 Yr. Avg. 2.3%
Net Profit Margin 1.5%
Net Profit Margin - 3 Yr. Avg. 2%
Effective Tax Rate 12%
Eff/ Tax Rate - 3 Yr. Avg. 5.2%
Payout Ratio 0%

VSAT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the VSAT stock intrinsic value calculation we used $1559 million for the last fiscal year's total revenue generated by ViaSat. The default revenue input number comes from 2017 income statement of ViaSat. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our VSAT stock valuation model: a) initial revenue growth rate of 10% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for VSAT is calculated based on our internal credit rating of ViaSat, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of ViaSat.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of VSAT stock the variable cost ratio is equal to 97.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for VSAT stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for ViaSat.

Corporate tax rate of 27% is the nominal tax rate for ViaSat. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the VSAT stock is equal to 3.6%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for VSAT are equal to 107.3%.

Life of production assets of 10 years is the average useful life of capital assets used in ViaSat operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for VSAT is equal to 4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1735 million for ViaSat - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 52 million for ViaSat is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of ViaSat at the current share price and the inputted number of shares is $3.6 billion.

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COMPANY NEWS

▶ Even at $4 Per Share, Gogo Wont Make You Dough   [Jul-17-18 10:53AM  InvestorPlace]
▶ ViaSat: Fiscal 4Q Earnings Snapshot   [04:46PM  Associated Press]
▶ How Financially Strong Is Viasat Inc (NASDAQ:VSAT)?   [May-21-18 06:43AM  Simply Wall St.]
▶ ViaSat CEO on broadband satellite service   [10:52AM  CNBC Videos]
▶ ViaSat reports 3Q loss   [Feb-08-18 05:47PM  Associated Press]
▶ ViaSat, Inc. to Host Earnings Call   [01:00PM  ACCESSWIRE]
▶ SSTL Joins Viasat's Real Time Earth Network   [Jan-25-18 07:05AM  PR Newswire]
▶ Viasat Appoints Sean Pak to Board of Directors   [Jan-11-18 11:00AM  PR Newswire]
▶ Stocks With Rising Relative Strength: Viasat   [Dec-26-17 03:00AM  Investor's Business Daily]
▶ Viasat Unveils New Global Brand Identity   [Nov-30-17 08:00AM  PR Newswire]
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