Shares of ViaSat (NASDAQ:VSAT) dropped 16.5% in after-hours trading yesterday after the company announced a malfunction in the launch of one of its satellite reflectors. ViaSat is a high-speed satellite internet service provider in the U.S. and across the globe.
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ViaSat said yesterday that one of the reflectors of its ViSat-3 Americas satellite failed to launch owing to an unforeseen circumstance. The company added that this event could potentially impact the performance of the satellite and the broadband services it offers in North America.
In addition, ViaSat acknowledged that they currently have 12 other satellites in service that could potentially make up for the loss. They mentioned that they are working with the manufacturer of the reflector, which certain sources have identified as Northrop Grumman (NYSE:NOC), in order to address the situation and find a solution.
The company has implied the possibility of using alternative reflectors from its two forthcoming ViaSat-3 satellites. These were ready to serve Europe, the Middle East, Africa (EMEA), and the APAC (Asia-Pacific) regions. The ViaSat-3 Americas satellite, which was successfully launched in early May from Elon Musk’s SpaceX Falcon Heavy rocket, is aimed at improving bandwidth services, enabling faster speeds, and increasing coverage in North America. While this event does put a dent in ViaSat’s ambition in the short term, the company is well poised to turn around the situation and continue on its path going forward.
Is ViaSat a Good Stock to Buy?
On TipRanks, VSAT has a Moderate Buy consensus rating based on two Buys and one Hold rating. The average ViaSat price target of $58.33 implies 35.7% upside potential from current levels. Meanwhile, VSAT stock has gained 33.2% year-to-date.
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