Investment Idea: Viasat, Inc. (VSAT)

Viasat, Inc. (VSAT) - Investment Idea

1. Executive Summary

Viasat (VSAT) presents a compelling investment opportunity driven by the anticipated synergies and cost savings from the recent Inmarsat acquisition, positioning it as a leader in global satellite communications. We believe the market is undervaluing the long-term growth potential of the combined entity, particularly in the high-growth mobility sectors like aviation and maritime, and the strategic value of its expanded global network.

2. Investment Thesis (Bull Case)

• Synergies from Inmarsat Acquisition: The acquisition of Inmarsat creates a powerful, vertically integrated satellite communications giant. The combined entity offers expanded global coverage and capacity, reducing redundancy and creating significant cost synergies. Management anticipates substantial savings in areas like satellite procurement, ground infrastructure, and administrative overhead. These synergies will drive margin expansion and improved profitability over the long term.
• Leading Position in Growing Mobility Markets: Viasat is well-positioned to capitalize on the rapidly expanding demand for connectivity in the mobility markets, particularly aviation and maritime. The company's "in-flight entertainment and aviation software services to commercial airlines" are a key driver of growth. The Inmarsat acquisition enhances its capabilities in these sectors, offering a broader portfolio of services and a larger global footprint. The increasing reliance on satellite-based internet services for cruise ships, energy offshore vessels, and consumer ferries presents another significant growth opportunity.
• Undervalued Technology and Intellectual Property: Viasat possesses valuable proprietary technology and intellectual property in satellite communication systems, including "application specific integrated circuit and monolithic microwave integrated circuit chips" and expertise in space system design and development. This intellectual property creates a competitive advantage and allows the company to offer differentiated products and services. The market is potentially undervaluing the strategic importance of these assets, especially in the context of increasing demand for secure and reliable satellite communications.