It's a good Monday for Viasat shareholders, even if the broader market is feeling a bit sluggish. While the Nasdaq and S&P 500 were essentially flat to slightly down, Viasat shares managed to push higher, and there's a clear reason why.
The company announced it has picked Rocket Lab to build a satellite bus for the U.S. Space Force's Space Systems Command under the Protected Tactical SATCOM-Global (PTS-G) program. This isn't just any satellite; it's designed to provide secure, anti-jam communications for U.S. and allied forces in contested environments. Think of it as a highly secure, jam-proof communication link for the military.
Rocket Lab will supply a geosynchronous Earth orbit version of its Lightning spacecraft platform, which will carry Viasat's dual-band X/Ka-band communications payload. The Space Force awarded Viasat the prime contract back on May 22, and the initial Swarm 1 award covers manufacturing, integration, testing, launch, and on-orbit checkout. The contract also includes five years of satellite operations and sustainment services.
This is a significant win for Viasat, and the market is taking notice. The stock's technical picture is looking pretty strong, too. Over the past 12 months, Viasat shares have surged an impressive 204%. At $83.33, the stock is trading about 5% above its 20-day simple moving average of $79.21, 13% above its 50-day SMA of $73.70, and a whopping 52% above its 200-day SMA of $54.77. The moving averages are in bullish alignment, with the shorter-term averages above the longer-term ones, which is a classic sign of an uptrend.
Momentum indicators are also pointing up. The moving average convergence divergence (MACD) indicator is above its signal line, and the histogram is positive. Viasat hit a 52-week high of $93.03 in July after a swing low in June, and traders are now watching to see if the stock can hold support above its shorter-term moving averages.
Key resistance levels to watch are $88.50 and then the 52-week high of $93.03. On the downside, support sits at $70, a previous demand area below the 50-day moving average.
Analysts are pretty upbeat on the stock, too. It carries a Buy consensus rating with an average price target of $86.67. Needham maintained a Buy rating and raised its price target to $105 on Aug. 5, following a previous raise to $90 on June 1. B. Riley Securities also maintained a Buy and bumped its target to $106 on May 29. That's a lot of confidence from the sell-side.
For ETF investors, Viasat has a notable presence in a few funds. It has a 5.77% weighting in the Procure Space ETF (UFO), a 4.35% weighting in the State Street SPDR S&P Telecom ETF (XTL), and a 4.08% weighting in the Invesco S&P SmallCap Momentum ETF (XSMO). Because of these sizable weightings, ETF inflows and outflows can have an impact on Viasat's share price.
At the time of publication on Monday, Viasat shares were up 0.54% at $83.32, according to market data. The stock's ability to hold above its moving averages and the positive analyst sentiment suggest that the rally might have more room to run, but as always, it's worth keeping an eye on those key support and resistance levels.
