Viasat (VSAT 9.72%) stock, the satellite communications company, tumbled 11.9% through 12:35 p.m. ET Monday. That’s the bad news.
The good news is that there’s no obvious catalyst for the sell-off — the opposite, actually.
Image source: Getty Images.
Lockheed Martin picks Viasat
Viasat announced this morning that Lockheed Martin (LMT 1.05%) has subcontracted Viasat to provide high-bandwidth Hybrid SATCOM Approach technology for two National Oceanic and Atmospheric Administration (NOAA) C-130J Hercules “Hurricane Hunter” aircraft that Lockheed is building. This will allow the airplanes to communicate with satellites via Viasat’s Ku/Ka broadband antenna.
Furthermore, “additional” aircraft may be required beyond the first two, meaning Viasat could get even more work from Lockheed down the road.
No value was stated for the initial subcontract, nor for the optional work that might follow, making it difficult to gauge precisely how much this contract moves the needle for Viasat stock.
Today’s Change
(-9.72%) $-7.84
Current Price
$72.78
Key Data Points
Market Cap
$11B
Day’s Range
$71.02 – $80.96
52wk Range
$8.61 – $89.78
Volume
122.1K
Avg Vol
1.8M
Gross Margin
27.42%
Needham picks Viasat, too
Separately, Needham analyst Ryan Koontz raised his price target on Viasat stock this morning to $90 per share, implying a 25% gain over the next 12 months.
As StreetInsider.com reports, Koontz emphasized Viasat’s spectrum assets as key to his placing such high value on the stock (should Viasat decide to sell them). Additionally, Koontz highlighted Viasat’s defense business and its “pending global JV Equatys” as growth drivers. The latter refers to a plan for Viasat to partner with a company called “Space42” in the United Arab Emirates, to offer 5G cell service and direct-to-device (D2D — more commonly known as direct-to-cell or DTC) connectivity from space.
That’s the bill case for Viasat, at least. And the bear?
Viasat has lost money for six straight years, and most analysts see it continuing to lose money for at least the next four. That doesn’t seem to worry Needham — but it does worry me!
Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.
