The satellite services market is growing significantly due to increased demand for satellite imagery data across various industries, earth observation services, and satellite communication services for IoT and 5G mobile networks. In addition, government agencies are adopting navigation and satellite systems to enhance their daily communication. And technological advancements across industries, such as artificial intelligence and machine learning, are creating further opportunities for the industry’s growth.
The use of satellite data in the commercial sector is also increasing. The mobile satellite services market is expected to grow at a compound annual growth rate (CAGR) of 6.2% to $6194.96 million by 2026, while the global satellite communication market is expected to expand at a 9.8% CAGR from 2021 – 2028. In addition, the Biden administration has issued a new framework for space policy and is planning to invest in satellites that can observe Earth from space, emphasizing climate research from space.
Viasat, Inc. (VSAT)
VSAT in Carlsbad, Calif., provides broadband and communications products and services worldwide. The company operates through three segments: Satellite Services; Commercial Networks, and Government Systems.
On December 20, VSAT announced two new contracts with the Navy Exchange Service Command (NEXCOM) to deliver triple-play services (Wi-Fi, voice, and TV) in Guam and managed Wi-Fi in Poland. Earlier this year, VSAT and NEXCOM’s Telecommunications Program Office announced a five-year contract extension, under which VSAT will provide network services at Navy facilities around the world. Its relationship with the U.S. Navy demonstrates the company’s dominant position in the industry.
Last month, VSAT announced that the mobility network in China, which uses VSAT’s innovative in-flight connectivity (IFC) equipment working over the Ka-band ChinaSat-16 satellite system, is now operational to meet the IFC needs of domestic and international airlines operating in the Chinese airspace. This project collaborates with China Satellite Communications, Co. Ltd. (China Satcom) and should benefit VSAT while contributing to its topline growth.
VSAT’s total revenue increased 26.5% year-over-year to $701.35 million in its fiscal second quarter, ended September 30, while its product revenues increased 20.6% from its year-ago value to $308.67 million. Its net income attributable to the company grew 67.7% from its year-ago value to $3.29 million. And the company’s EPS increased 33.3% year-over-year to $0.04.
The $2.82 billion consensus revenue estimate for the current year indicates a 24.8% improvement from the last year. And analysts expect the company’s EPS to be $0.31 in the current year, reflecting a 244.4% rise year-over-year. Also, its VSAT surpassed the Street’s EPS estimates in three of the trailing four quarters.
Over the past year, the stock has gained 41% in rice to close yesterday’s trading session at $46.04.
Wall Street’s $61.00 median price target indicates a 32.5% potential upside from its last closing price. The 12-month price targets range from a low of $51.00 to a high of $70.00.
Astra Space, Inc. (ASTR)
ASTR operates as a space launch company, providing satellite launch services. The company is headquartered in Alameda, Calif.
ASTR completed its first commercial orbital launch for the United States Space Force on November 19, conducted from Astra’s Kodiak Spaceport, located at the Pacific Spaceport Complex in Kodiak, Alaska. “Reaching orbit is a historic milestone for Astra,” said Chris Kemp, Founder, Chairman, and CEO of Astra. The company intends to scale up rocket production and launch cadence.
On December 6, ASTR announced its plans to deploy its first satellite in orbit for the National Aeronautics and Space Administration (NASA) in January 2022, from Cape Canaveral. The announcement marks a broad advancement in its global spaceport strategy and should strengthen the company’s position in the industry.
ASTR’s net cash provided by financing activities increased 2,137.5% year-over-year to $488.90 million for the nine months ended Sept. 30. Its cash and cash equivalents balance came in at $378.65 million, up 7,112.4% year-over-year.
Analysts expect ASTR’s revenues to increase 1,963.9% year-over-year to $42.93 million in the next year. The consensus EPS is expected to improve 26.4% year-over-year in the next year.
The stock has declined 33.2% in price over the past year to close its last trading session at $6.75.
Wall Street’s median price target of $11.00 indicates a 63% potential upside from its last closing price. The 12-month price targets range from a low of $9.00 to a high of $13.00.
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VSAT shares were unchanged in premarket trading Tuesday. Year-to-date, VSAT has gained 3.37%, versus a 0.58% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics. More...
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