December 18, 2008 - ViaSat, Inc. (VSAT-NASDAQ) engages in the production of satellite and other wireless communications and networking systems for government and commercial customers. The company's Government Systems segment develops and produces data links, including MIDS terminals, and MIDS JTRSdevelopment and unmanned vehicle technologies; information security and assurance products and services, which enable military and government users to communicate secure information over secure and non-secure networks; and government satellite communication systems and products, including UHF DAMA satellite communications products consisting of modems, terminals, and network control systems, and broadband solutions for government customers.

The Satellite services segment offers managed broadband services that provide terrestrial and satellite connections through a call center and network management operation for everyday enterprise networking or backup protection for primary networks; mobile broadband services, which include network management services for its customers utilizing mobile communication systems, and through its network management center; and wholesale broadband services over a Ka-band spot beam satellite in North America. The company was founded in 1986 and is headquartered in Carlsbad, California.

What makes this stock timely is the ever increasing need for secure networks, especially high-performance satellite technology based networks for the government and commercial users. With the need for secure communications only getting stronger, VSAT should see solid growth for years.

While earnings dipped in 2002 (negative 18 cents), they've been going higher ever since. In 2003, they were 51 cents a share, then 83 cents in 2004, followed by $1.00 in 2005. They jumped to $1.27 in 2006, then went to $1.36. This year, analysts see $1.55 and next year $1.94 (that's the average for the 7 analysts following the stock). The December quarter numbers should be 42 cents a share, up from 40 cents last year at the same time. For the first quarter of 2009, estimates are for 46 cents a share, up from 41 cents in the first three months of 2008.

The top line is growing nicely as well. For the September quarter, total sales were up 9%, with a 22% increase in government systems where satellite communications products are sold. On the Commercial side, revenues dropped by 9% as consumer demand dropped. Earnings were up 11% for the third period.

Backlog is solid with the pipeline holding $523.6 million of orders, up 19% from the same time last year. Total revenues for 2007 were $574.7 million. Contract awards in the third quarter jumped by 35% to $255.5 million. Analsyts see sales growing by 13% in 2009 and 10.5% in 2010. Over the next 5 years, they see profits growing, on average, by 15% annually, down from the rapid growth of the previous 5 years when earnings increased, on average, by 21.6% a year.

More numbers: Market Cap is $666.2 million. Trailing P/E is 19 while the Forward P/E is 11.14. Operating margin for the last 12 months was 7.50% while Profit margin was 5.93%. There is $91 million in cash on the books with no debt. Total cash per share is $2.94. Current ratio is 3.06. Book Value is $13.92. There are 30.84 million shares outstanding with a float of 27.03 million. Insiders own 12.24% of the stock while institutions have 73%. Beta is 1.08.

Valuation here is attractive. The average annual P/E ratio over the last 5 years has ranged between 35 and 20.5. With a forward p/e of only 11 and brighter prospects ahead, it seems this stock is selling for a relatively attractive price. Of course, if those earnings don't show up as predicted, the price will go even lower. But with a stronger backlog and an ever-increasing demand for secure communications, ViaSat should be able to deliver.

Company Web site: www.viasat.com

- Ted Allrich