Why Is ViaSat (VSAT) Down 7.8% Since Last Earnings Report?

It has been about a month since the last earnings report for ViaSat (VSAT). Shares have lost about 7.8% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is ViaSat due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. Viasat's Q2 Loss Wider Than Expected, Revenues Decline Y/YViasat reported mixed second-quarter fiscal 2025 results, with the top line surpassing the Zacks Consensus Estimate but the bottom line missing the same. The company’s top line marginally declined, owing to weakness in space and mission systems, maritime and advanced technologies and other verticals. Growth in aviation and government satcom verticals supported the top line during the quarter.VSAT’s Net IncomeThe company incurred a net loss of $137.6 million or $1.07 per share compared with a net loss of $767.2 million or $6.16 per share in the year-ago quarter. Lower selling, general and administrative costs led to a narrower loss during the quarter. However, the bottom line was wider than the Zacks Consensus Estimate of a loss of 56 cents.Excluding non-recurring items, Viasat reported a non-GAAP net loss of $29.4 million or 23 cents per share against a net income of $149.7 million or $1.19 per share in the year-ago period.Revenues of ViasatRevenues fell 8% to $1.12 billion, owing to declining trends in the Defense and Advanced Technologies segment. However, the top line surpassed the consensus estimate by $15 million.Product revenues were $323.9 million, down from $401.7 million in the year-ago quarter. Net sales from Service decreased to $798.3 million from $823.7 million a year ago.Revenues from the Communication Services segment decreased to $826 million from $847 million in the year-ago quarter. The improvement in aviation and government satcom was offset by weakness in maritime and fixed services verticals. The segment’s adjusted EBITDA declined to $318 million from $350 million.Revenues from Defense and Advanced Technologies were $296 million, down 22% year over year. Demand softness in space and mission systems, advanced technologies and other end markets affected the top line. Solid demand for tactical networking products was a tailwind. Adjusted EBITDA came in at $57 million compared with $137 million a year ago.VSAT’s Other DetailsIn the September quarter, the company reported an operating loss of $24.7 million compared with an operating loss of $804.7 million in the prior-year quarter. Adjusted EBITDA was $375 million, down from $486 million in the year-ago quarter.Cash Flow & Liquidity for ViasatDuring the second quarter of fiscal 2025, Viasat generated an operating cash flow of $239 million compared with $219 million in the prior-year period. As of Sept. 30, 2024, the company had $3.53 billion in cash and cash equivalents, with a net debt of $5.53 billion. Capital expenditures declined 37% year over year to $229 million, primarily due to lower satellite expenditures and ground infrastructure costs.VSAT’s OutlookFor fiscal 2025, management expects total revenues to remain roughly flat or increase slightly year over year. Adjusted EBITDA from continuing operations is projected to grow by mid-single digits. Revenues from Communication Services are expected to be down by low single digits in fiscal 2025 compared to fiscal 2024. Solid growth in aviation and government satcom services is expected to be offset by weak demand in U.S. fixed broadband and maritime verticals. Defense and Advanced Technologies revenues are expected to increase in the mid-teens, driven by tactical networking products, antenna systems solutions, recurring contributions from certain licensing agreements and strong demand for AI applications.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in estimates review.The consensus estimate has shifted -83.43% due to these changes.VGM ScoresAt this time, ViaSat has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise ViaSat has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.1% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Viasat Inc. 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