Is Viasat Worth Buying or Is Execution Risk Still Too High Today?

Viasat VSAT is at an important stage in its growth strategy. The company is making steady progress with its next-generation satellite network, expanding its government business and strengthening its mobility operations. At the same time, investors must weigh those opportunities against commercialization risks, intense competition and ongoing weakness in certain legacy businesses. The key question is whether Viasat's improving fundamentals justify buying the stock today or whether execution risks warrant a more patient approach. 

Why Viasat's Growth Story Is Improving

Several operational trends suggest that Viasat's long-term outlook is improving. The company's ViaSat-3 program continues to move toward commercial service. During the first quarter of fiscal 2027, ViaSat-3 Flight 2 completed all bus in-orbit testing, while Flight 3 completed reflector deployment after quarter-end and entered in-orbit testing ahead of expected commercial service in late August or early September 2026. Management expects the expanded satellite capacity, flexible beamforming capabilities and broader geographic coverage to improve bandwidth utilization and support higher-value aviation, enterprise, maritime and government services. 

Government markets are also becoming a larger contributor to future growth. Viasat reported approximately $1.3 billion in company-wide awards and record backlog during the quarter, highlighted by the next phase of the Protected Tactical SATCOM-Global (PTS-G) program. The company also continues to see growing government SATCOM demand and its largest-ever government opportunity pipeline. 

Mobility businesses remain another source of strength. Aviation revenue benefited from more connected aircraft and higher average revenue per aircraft, while the NexusWave maritime platform continues adding customers as demand for multi-orbit connectivity solutions expands. Management is also investing in AI-driven network optimization and multi-orbit architectures designed to improve network efficiency, reduce airtime costs and enhance customer experience. These initiatives could strengthen Viasat's competitive position as satellite communications markets continue evolving. 

Why Investors Should Remain Careful

While Viasat's long-term opportunities are expanding, several risks remain. Competition across satellite communications continues to intensify as established operators and emerging providers invest heavily in next-generation networks. Viasat competes with Iridium Communications Inc. IRDM and AST SpaceMobile, Inc. ASTS. Iridium continues to benefit from strong demand for its global L-band satellite network serving government, aviation and maritime customers. Meanwhile, AST SpaceMobile is developing a space-based cellular broadband network aimed at delivering direct-to-device connectivity through partnerships with mobile network operators. Viasat's success will depend on its ability to differentiate its services while executing on its network expansion.

Legacy residential broadband also continues to face structural pressure as competition increases. In addition, defense revenue can fluctuate because of government procurement timing, while foreign exchange movements and Viasat's broad international operations introduce additional earnings volatility. 

Perhaps the largest execution challenge remains successful commercialization of the ViaSat-3 constellation. Although deployment milestones have progressed as planned, investors will ultimately focus on customer adoption, capacity utilization and whether the new satellites generate the anticipated financial returns. 

Does VSAT's Valuation Match the Opportunity?

Viasat's valuation appears to reflect a company transitioning from investment mode toward improving cash generation rather than one with fully mature earnings. The company generated $72 million in free cash flow, excluding non-recurring items, during the first quarter and continued reducing leverage through disciplined capital allocation. Management remains focused on generating cash, strengthening the balance sheet and lowering capital intensity while investing selectively in growth opportunities.

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The accompanying research also notes that improving balance-sheet flexibility, continued positive free cash flow and expanding higher-value government and mobility businesses support the long-term investment case. At the same time, execution risk surrounding ViaSat-3 and competitive market conditions suggest investors should balance valuation considerations against operational uncertainty rather than relying on future upside expectations alone. 

Can Earnings Support the Long-Term Thesis?

Viasat reported mixed first-quarter fiscal 2027 results, with revenue falling short of expectations while earnings exceeded the Zacks Consensus Estimate. Revenue declined modestly year over year as growth in aviation, government SATCOM and tactical networking was offset by weakness in fixed broadband and lower IP licensing revenue. 

Management maintained its fiscal 2027 outlook and continues to expect a stronger second half of the fiscal year supported by record backlog, government awards, expanding satellite capacity and continued execution across its core businesses. The company also remains focused on generating positive free cash flow, improving adjusted EBITDA and continuing its deleveraging efforts. 

Although near-term quarterly performance may remain uneven, management believes operational improvements across government communications, mobility services and ViaSat-3 deployment provide a foundation for more sustainable long-term growth.

How the Zacks Rank Supports a Patient View

The stock currently carries a Zacks Rank #3 (Hold), reflecting a balanced investment outlook rather than a clearly bullish or bearish view. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Viasat also has a Value Score of B, Growth Score of B, Momentum Score of F and VGM Score of B. The favorable Value and Growth Scores indicate reasonable valuation characteristics and improving long-term growth prospects, while the VGM Score of B reflects a balanced combination of those factors. However, the Momentum Score of F suggests the stock currently lacks strong momentum characteristics under the Zacks methodology despite recent gains. Together, these indicators support a measured approach, recognizing improving fundamentals while acknowledging that execution risks have not been fully eliminated. 

Viasat is making meaningful progress across several strategic initiatives, including the rollout of the ViaSat-3 constellation, expansion of government satellite communications, continued strength in aviation connectivity and ongoing balance-sheet improvement. These developments provide encouraging signs that the company's long-term growth strategy is gaining traction.

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This article originally published on Zacks Investment Research (zacks.com).

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