William Blair Upholds Outperform on ViaSat After Southwest Picks Starlink for Older Jets

VSAT TSAT UAL

William Blair has kept an Outperform rating on ViaSat after Southwest Airlines said it will install SpaceX’s Starlink on more than 300 aircraft this year. The firm says the Starlink rollout replaces Anuvu systems on older planes and does not affect ViaSat equipment on Southwest’s existing fleet; Southwest will continue to fit ViaSat systems on all new Boeing 737 MAX deliveries. William Blair points to upcoming capacity from the ViaSat-3 F2 satellite and the value of ViaSat’s defense business and L-band spectrum in its valuation work.

Key Points

William Blair maintains an Outperform rating on ViaSat after Southwest’s plan to install Starlink on more than 300 aircraft, clarifying the change replaces Anuvu on older jets and does not remove ViaSat equipment from current aircraft.
ViaSat expects a significant increase in North American capacity when the ViaSat-3 F2 Ka-band satellite becomes operational this summer; the company also plans to support Telesat’s LEO connectivity once available.
William Blair’s sum-of-parts valuation places distinct values on ViaSat’s defense tech business, satellite communications operations, and L-band spectrum, and after net debt implies potential upside above $60 per share within 12 months.

William Blair has reaffirmed an Outperform rating on ViaSat (NASDAQ:VSAT) after Southwest Airlines disclosed plans to outfit in excess of 300 aircraft with SpaceX’s Starlink connectivity this year. The research firm made clear that Southwest’s Starlink installations will replace Anuvu systems on older jets and will not displace planes currently equipped with ViaSat hardware.

Importantly, Southwest intends to continue installing ViaSat systems on every new Boeing 737 MAX aircraft it takes delivery of, preserving the commercial relationship between the carrier and the satellite communications provider.

William Blair’s sustained positive stance on ViaSat rests on several company-specific elements highlighted in its analysis. One immediate capacity boost is expected when the company brings its ViaSat-3 F2 Ka-band satellite into service this summer; the firm previously disclosed that this satellite represents roughly $1 billion of investment and will materially expand ViaSat’s North American service capacity. In addition, ViaSat has plans to add support for low Earth orbit satellite connectivity from Telesat (NASDAQ:TSAT) when that service becomes available, broadening its connectivity options.

Beyond near-term capacity additions, William Blair characterizes ViaSat as a "double special situation" because of the distinct value the firm attributes to its defense and advanced technologies division and to its global L-band spectrum assets. The defense and advanced technologies segment is projected by William Blair to generate $1.4 billion of revenue in fiscal 2026, growing at 12% with an EBITDA margin of 22%.

Using a sum-of-parts framework, William Blair assigns separate enterprise values to ViaSat’s operating divisions: $5 billion for the defense technology business, $4 billion for the satellite communications business, and $3.5 billion for the company’s L-band spectrum assets. After subtracting roughly $5 billion of net debt, the firm’s analysis implies the potential for ViaSat’s equity to trade above $60 per share within the next 12 months.

William Blair’s note underscores both the operational and asset-based levers supporting its target, rather than attributing the firm’s view to the Southwest-SpaceX announcement. The brokerage’s valuation rests on discrete estimates for each material component of ViaSat’s business and the company’s balance sheet obligations.

Separately in the airline sector, American Airlines reported fourth-quarter 2025 results that fell short of analyst projections. The carrier posted adjusted earnings per share of $0.16, missing an anticipated $0.38, and reported revenue of $14.0 billion compared with the forecast of $14.04 billion. Those results have contributed to investor disappointment.

Concurrently, American Airlines’ CEO Robert Isom is facing pressure from the Allied Pilots Association, which represents about 16,000 pilots. The pilots are contemplating a vote of no confidence in Isom and his executive team as the carrier continues to chase the profitability levels of peers Delta Air Lines and United Airlines. The developments at American Airlines illustrate operational and governance challenges within the airline industry amid recent performance shortfalls.

This report reflects William Blair’s published analysis and the companies’ announcements; it does not introduce new projections beyond those disclosed by the firm or the carriers.

Risks

Southwest’s decision to roll out Starlink to over 300 planes introduces competitive dynamics for in-flight connectivity providers; while the change replaces Anuvu on older aircraft and does not affect ViaSat-installed planes, it alters the connectivity mix on Southwest’s fleet - this impacts the airline and satellite communications sectors.
Timing and successful commissioning of ViaSat-3 F2 are material to near-term capacity expansion; any delay or operational issues with the satellite would affect ViaSat’s North American service capacity projections - this risk impacts the satellite communications sector.
Weak airline quarterly results and labor unrest at American Airlines, including a potential vote of no confidence from the Allied Pilots Association representing about 16,000 pilots, add uncertainty to airline operations and investor sentiment - this affects the airline sector and wider travel-related markets.

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