Viasat Inc., a global satellite communications company, has announced plans to cut 800 jobs, equivalent to a 10% reduction in its workforce. This strategic move aims to improve profitability and is part of the ongoing integration between Viasat and Inmarsat, which was acquired on May 31. The company expects to save approximately $100 million per year as a result of this decision.
The job cuts align with Viasat’s strategy of focusing investments in high-growth areas to ensure long-term success. The company anticipates incurring charges of $45 million, primarily in the second half of 2024, due to these layoffs.
Despite a significant drop in Viasat’s stock price over the past three months, with a decline of 40.2%, the announcement was followed by an over 1% premarket surge. This rise contrasts with the recent 6.1% decline in the S&P 500 index.
According to InvestingPro Insights, Viasat Inc. (VSAT) presents a mixed picture. With a market capitalization of $2.25 billion and a price-to-value ratio of 0.42 in the first quarter of 2024, VSAT is trading at a low multiple. This could be a potential opportunity for investors seeking undervalued stocks.
However, InvestingPro Tips highlights that VSAT is grappling with significant debt and has not been profitable in the past twelve months. This might have contributed to the stock’s significant decline in the past year. Nonetheless, the company’s revenue growth is accelerating, and analysts forecast growth in both sales and net income this year. This positive forecast may indicate resilience and potential recovery for the company.
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