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Viasat Earnings Power Value (EPV)

: $-97.48 (As of Jun21)
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As of Jun21, Viasat's earnings power value is $-97.48. *

* GuruFocus does not store EPV value into our database if Average Maintenance CAPEX is 0.

Margin of Safety is N/A.

The basic concept of EPV is that one should value a stock based on the current free cash flow of a company and not on future projections which may, or may not, come true. It is arguably a better way to analyze stocks than Discounted Cash Flow analysis that relies on highly speculative growth assumptions many years into the future. Assumption: Current profitability is sustainable.


Viasat Earnings Power Value (EPV) Historical Data

The historical data trend for Viasat's Earnings Power Value (EPV) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Viasat Annual Data
Trend Mar12 Mar13 Mar14 Mar15 Mar16 Mar17 Mar18 Mar19 Mar20 Mar21
Earnings Power Value (EPV)
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -59.75 -76.87 -80.88 -99.85 -95.63

Viasat Quarterly Data
Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21
Earnings Power Value (EPV) Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -104.99 -100.30 -98.23 -95.63 -97.48

Competitive Comparison

For the Communication Equipment subindustry, Viasat's Earnings Power Value (EPV), along with its competitors' market caps and Earnings Power Value (EPV) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Viasat Earnings Power Value (EPV) Distribution

For the Hardware industry and Technology sector, Viasat's Earnings Power Value (EPV) distribution charts can be found below:

* The bar in red indicates where Viasat's Earnings Power Value (EPV) falls into.



Viasat Earnings Power Value (EPV) Calculation

Earnings Power Value also known as just Earnings Power is a valuation technique popularised by Bruce Greenwald, an authority on value investing at Columbia University. It is arguably a better way to analyze stocks than Discounted Cash Flow analysis that relies on highly speculative growth assumptions many years into the future.

The basic concept of EPV is that one should value a stock based on the current free cash flow of a company and not on future projections which may, or may not, come true. This valuation tool excludes the potential growth that a company may have so that needs to be looked at separately. Since future growth is excluded from the analysis, only the maintenance capital expenditures are subtracted from after-tax EBIT (earnings before interest and taxes) and growth capex is ignored.

Viasat's "Earning Power" Calculation:

Average of Last 20 Quarters Last Quarter
Revenue 2,018
DDA 323
Operating Margin % -0.54
SGA * 25% 114
Tax Rate % 122.15
Maintenance Capex 612
Cash and Cash Equivalents 276
Short-Term Debt 81
Long-Term Debt 2,428
Shares Outstanding (Diluted) 73

1. Start with "Earnings" not including accounting adjustments (one-time charges not excluded unless policy has changed). "Earnings" are "Operating Income.

2. Look at average margins over a business/Industry cycle: Average Operating Margin = -0.54%

To normalize margins and eliminate the effects on profitability of valuing the firm at different points in the business cycle, it is usually best to take a long-term average of operating margins. Ideally this would be as long as 10 years and include at least one economic downturn. However, since most of companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year margin.

3. Multiply average margins by sustainable revenues and then adjust for maintenance SGA. This yields "normalized" EBIT:

To be conservative, GuruFocus uses an average of the 5 year revenues as the sustainable revenue.
EPV analysis recognises that part of SG&A expenditure is made to maintain and replace the existing assets, while part is made to grow sales. Since EPV is only interested in what it costs a going concern to maintain its existing asset base, it adds back a percentage of SG&A (between 15% and 50% - this is a matter of judgment and industry knowledge) to make up for the fact that some of this expenditure went to fund growth and shouldn't be accounted for. To start off, we assume 25% for the sake of prudence.
Sustainable Revenue = $ Mil, Average Operating Margin = -0.54%, Average Adjusted SGA = 114,
therefore "Normalized" EBIT = Sustainable Revenue * Average Operating Margin + Average Adjusted SGA = 2,018 * -0.54% +114 = $103.58185435 Mil.

4. Multiply by one minus Average Tax Rate (NOPAT):

Same as average operating margin calculation, GuruFocus takes an average of the 5 years tax rates.
Average Tax Rate = 122.15%, and "Normalized" EBIT = $103.58185435 Mil,
therefore After-tax "Normalized" EBIT = "Normalized" EBIT * ( 1 - Average Tax Rate ) = 103.58185435 * ( 1 - 122.15% ) = $-22.94182701071 Mil.

5. Add back Excess Depreciation (after tax at 1/2 average tax rate). This yields "normalized" Earnings:

Excess Depreciation = Average DDA * % of Excess Depreciation (after tax at 1/2 average tax rate) = 323 * 0.5 * 122.15% = $197.1746738185 Mil.
"Normalized" Earnings = After-tax "Normalized" EBIT + Excess Depreciation = -22.94182701071 + 197.1746738185 = $174.23284680779 Mil.

6. Adjusted for Maintenance Capital Expenditure:

First, calculate the revenue change regarding to the previous year. If the revenue decreased from the previous year, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous year, then calculate the percentage of Net PPE as of corresponding Revenue.
Third, calculate Capital Expenditure (positive) - percentage of Net PPE as of corresponding Revenue * revenue increase.
If [Capital Expenditure (positive) - percentage of Net PPE as of corresponding Revenue * revenue increase] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - percentage of Net PPE as of corresponding Revenue * revenue increase] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - percentage of Net PPE as of corresponding Revenue * revenue increase.
Fourth, GuruFocus uses an average of the 5 year maintenance capital expenditures as maintenance CAPEX.
Viasat's Average Maintenance CAPEX = $612 Mil *.
* GuruFocus does not store EPV value into our database if Average Maintenance CAPEX is 0.

7. Investors require a return of "WACC" for the risk they are taking: WACC = 9%

8. Viasat's current cash and cash equivalent = $276 Mil.
Viasat's current interest bearing debt = Long-Term Debt & Capital Lease Obligation + Short-Term Debt & Capital Lease Obligation = 2,428 + 81 = $2509.224 Mil.
Viasat's current Shares Outstanding (Diluted Average) = 73 Mil.

Viasat's Earnings Power Value (EPV) for Jun21 is calculated as:

EPV = ( ( Norm. Earnings-Maint. CAPEX *) / WACC + CashandEquiv - Int. Bearing Debt ) / Shares Outstanding (Diluted Average)
= ( ( 174.23284680779 - 612)/ 9%+276-2509.224 )/73
=-97.48

Margin of Safety (EPV)=( Earnings Power Value (EPV)-Current Price )/Earnings Power Value (EPV)
=( -97.476965889418-54.615 )/-97.476965889418
= N/A

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* GuruFocus does not store EPV value into our database if Average Maintenance CAPEX is 0.


Viasat  (NAS:VSAT) Earnings Power Value (EPV) Explanation

Assumption: Current profitability is sustainable.

Earnings power value (EPV) uses a very basic equation which assumes no growth, although it does rely on an assumption about the cost of capital as well as the fact that current earnings are sustainable. It also involves several adjustments to clean up the underlying Earnings figures.


Be Aware

Though using today's earnings in calculating Earnings Power Value, GuruFocus is normalizing these earnings to the business cycle. This eliminates the effects on profitability of valuing the firm at different points in the business cycle. This means that we are considering the average earnings over 5 years.


Viasat Earnings Power Value (EPV) Related Terms

Thank you for viewing the detailed overview of Viasat's Earnings Power Value (EPV) provided by GuruFocus.com. Please click on the following links to see related term pages.


Viasat Business Description

Viasat logo
Industry
Technology » Hardware NAICS : 334220 SIC : 3663
Traded in Other Exchanges
Address
6155 El Camino Real, Carlsbad, CA, USA, 92009
Viasat Inc provides bandwidth technologies and services in three segments: satellite services, which provides satellite-based high-speed broadband services to consumers, enterprises, and commercial airlines; commercial networks, which develops end-to-end communication and connectivity systems; and government systems, which produces network-centric Internet Protocol-based secure government communication systems. A large majority of the firm's revenue is generated in the United States, with the rest coming from the Americas, Europe, Middle East, Africa, and Asia-Pacific.
Executives
Stenbit John P director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: STENBIT JOHN P a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Wise Theresa director 400 FAIRVIEW AVENUE NORTH SUITE 1200 SEATTLE WA 98109
Johnson Robert W director 2280 UNIVERSITY DRIVE NEWPORT BEACH CA 92660
Rao Varsha Rajendra director 6155 EL CAMINO REAL CARLSBAD CA 92009
Pak Sean director 6155 EL CAMINO REAL CARLSBAD CA 92009
Klarman Seth A 10 percent owner 10 ST JAMES AVENUE STE 1700 BOSTON MA 02116
Baupost Group Llc/ma 10 percent owner 10 ST JAMES AVE SUITE 1700 BOSTON MA 02116
Baupost Group Gp, L.l.c. 10 percent owner 10 ST. JAMES AVENUE SUITE 1700 BOSTON MA 02116
Peck Bobby Ray Jr 10 percent owner 199 FREMONT ST SUITE 2500 SAN FRANCISCO CA 94105
Raab Andrew John 10 percent owner 199 FREMONT ST SUITE 2500 SAN FRANCISCO CA 94105
Fpr Partners Llc 10 percent owner 199 FREMONT STREET SUITE 2500 SAN FRANCISCO CA 94105
White Harvey director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: WHITE HARVEY a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Ryan David Louis officer: President Commercial Networks 6155 EL CAMINO REAL CARLSBAD CA 92009
Dodd James Michael officer: President, Global Mobile 6155 EL CAMINO REAL CARLSBAD CA 92009
Lippert Keven K officer: Executive Vice President 6155 EL CAMINO REAL CARLSBAD CA 92009

Viasat Headlines

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