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Eutelsat Communications (FR:ETL)
:ETL
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Eutelsat Communications
(OTC:ETL)
Rating:54Neutral
Price Target:
€4.00
▲(16.96%Upside)
Positive Factors
Debt Costs
Debt costs have fallen materially, impacting Eutelsat shares positively.
Funding Proposal
Eutelsat shares have risen materially due to a proposal to establish a loan fund to support European defence spend.
Government Funding
The scale and speed of the shift in European governments’ stance on defence/satellite funding has exceeded expectations.
Negative Factors
Competitive Pressures
Eutelsat is less well-positioned as competitors like Starlink and Amazon’s project Kuiper gain strength.
Execution Risks
Eutelsat faces competitive pressures, rising debt, and execution risks that downgrade its stock rating.
Valuation Risks
There is further downside risk to Eutelsat's valuation from execution on capital expenditures and rising debt.
Eutelsat Communications (ETL) vs. iShares MSCI France ETF (EWQ)
Market Cap
$1.67B
Dividend YieldN/A
Average Volume (3M)3.76M
Price to Earnings (P/E)―
Beta (1Y)0.57
Revenue Growth10.31%
EPS Growth-494.84%
CountryFR
Employees1,514
SectorTechnology
Sector Strength84
IndustryCommunication Equipment
Share Statistics
EPS (TTM)-1.84
Shares Outstanding475,178,380
10 Day Avg. Volume7,580,867
30 Day Avg. Volume3,758,228
Financial Highlights & Ratios
PEG Ratio0.17
Price to Book (P/B)0.50
Price to Sales (P/S)0.00
P/FCF Ratio3.39
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$1.40Price Target Upside-59.13% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering2
Eutelsat Communications Business Overview & Revenue Model
Company DescriptionEutelsat Communications S.A. engages in the operation of telecommunication satellites for the digital communications markets. It provides video services, such as broadcast DTH, distribution, HD and ultra HD channels, and occasional use services; connectivity services; and Internet of Things and low earth orbit solutions. The company offers its services under the Eutelsat brand directly and through distributors. As of June 30, 2021, it operated 38 satellites in geostationary orbit. The company serves broadcasters, companies, telecom operators, individuals, and government agencies in France, Italy, the United Kingdom, rest of Europe, the Americas, the Middle East, Africa, Asia, and internationally. The company was founded in 1977 and is headquartered in Issy-les-Moulineaux, France.
How the Company Makes MoneyEutelsat Communications generates revenue through leasing satellite capacity to various customers across multiple sectors. Its primary revenue streams include video services, where it provides broadcasting capabilities to television and radio networks, and data services, which involve offering broadband connectivity to internet service providers and telecommunications companies. Additionally, Eutelsat earns income from government services by supplying secure communication solutions for military and institutional clients. The company also benefits from strategic partnerships and joint ventures, which expand its market reach and enhance its service offerings. Key factors contributing to its earnings include long-term contracts with customers, a diversified portfolio of services, and investments in advanced satellite technology to maintain a competitive edge.
Eutelsat Communications Earnings Call Summary
Earnings Call Date:Feb 14, 2025
(Q2-2025)
| % Change Since: 98.95%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with significant strategic achievements such as the expansion of the LEO constellation and strong growth in Government Services and Fixed Connectivity segments. However, these were offset by major financial challenges, including a substantial goodwill impairment, declining Video revenues, and a significant net income loss. The company is also facing increased competition and financial leverage challenges.Q2-2025 Updates
Positive Updates
LEO Constellation Expansion
Eutelsat procured the first batch of 100 LEO satellites required for the Iris2 multi-orbit constellation, with plans for an additional 340 satellites, marking significant progress in their LEO build-out strategy.
Government Services and Fixed Connectivity Growth
Government Services and Fixed Connectivity revenues rose by 21.9% and 22% year-on-year, respectively, indicating strong demand in these segments.
Cost Control and CapEx Reduction
Gross CapEx is now expected to be between €500 million and €600 million, lower than the initially guided range of €700 million to €800 million, due to timing of LEO investments and vigilance on GEO expenditures.
Strategic Partnership and Transaction
Eutelsat exercised the put option for the sale of a majority stake in passive ground infrastructure, expected to deliver net proceeds of around €500 million in 2026.
Negative Updates
Goodwill Impairment
Eutelsat took a goodwill impairment of €535 million on various GEO assets due to lower expected future cash flows, reflecting increased competition and a decline in demand for Video services.
Video Revenue Decline
Video segment revenues, representing 51% of total revenues, declined by 6.4% year-on-year, in line with the secular market decline.
Net Income Loss
Group share of net income showed a loss of €873.2 million, significantly higher than the loss of €191.3 million a year earlier, due to higher operating expenses and goodwill impairment.
High Net Debt
Net debt stood at €2,695.8 million, with a net debt-to-adjusted EBITDA ratio of 3.92 times, indicating increased financial leverage.
Company Guidance
During the call, Eutelsat Group provided guidance on several key financial metrics and strategic initiatives. For the first half of the fiscal year 2024-2025, Eutelsat reported total revenues of €606 million, a 5.9% increase on a reported basis and a 4.4% increase like-for-like. The operating vertical revenues amounted to €600 million, up 3.9% like-for-like, with an adjusted EBITDA margin of 55.1%. The net debt to adjusted EBITDA ratio was 3.92 times. The company confirmed its full-year revenue and EBITDA margin objectives, albeit with reduced headroom. Eutelsat expects gross CapEx to be between €500 million and €600 million, down from an earlier guidance of €700 million to €800 million, reflecting timing adjustments in LEO investments and increased vigilance on GEO expenditures. Additionally, Eutelsat announced a goodwill impairment of €535 million on GEO assets due to lower expected cash flows. Strategically, the company highlighted the signing of the Iris2 multi-orbit constellation agreement and plans to invest around €2 billion in the project, with a back-end loaded contribution. Eutelsat aims to leverage its strategic initiatives, including a put option for its passive ground infrastructure, to strengthen its financial resources and support its LEO constellation expansion.Eutelsat Communications Financial Statement Overview
Summary
Eutelsat Communications faces challenges with declining revenue and profitability, reflected in negative growth rates and net losses. Despite a high gross profit margin, operating inefficiencies have eroded income margins. The balance sheet is moderately leveraged, providing some stability. Cash flow generation is positive, though growth has slowed, indicating the need to address inefficiencies to improve profitability.Income Statement
Eutelsat Communications has experienced a decline in revenue with a negative growth rate over the past year. The gross profit margin remains high at approximately 83.07% for the most recent year, indicating efficient production processes. However, the company has reported a negative EBIT and net profit margin, reflecting operating inefficiencies and net losses due to high expenses.45
Neutral
Balance Sheet
The balance sheet shows that Eutelsat Communications has a relatively stable equity base with a debt-to-equity ratio of 0.88, indicating moderate financial leverage. The equity ratio is approximately 45.20%, suggesting a balanced capital structure. However, the company's total assets have increased marginally, which might indicate limited growth in asset utilization.60
Neutral
Cash Flow
Eutelsat Communications has a positive free cash flow, although the growth rate has been negative compared to previous years. The operating cash flow to net income ratio is unreliable due to negative net income, but the operating cash flow remains robust, demonstrating good cash generation capability. However, the decline in free cash flow growth is a point of concern.50
Neutral
| Breakdown | TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.25B | 1.21B | 1.13B | 1.15B | 1.23B | 1.28B |
| Gross Profit | 1.01B | 1.01B | 572.50M | 1.06B | 1.14B | 657.70M |
| EBITDA | 602.60M | 525.80M | 1.08B | 911.80M | 833.00M | 1.05B |
| Net Income | -991.90M | -309.90M | 314.90M | 230.80M | 214.10M | 297.60M |
Balance Sheet | ||||||
| Total Assets | 7.62B | 8.52B | 7.41B | 7.57B | 7.28B | 7.58B |
| Cash, Cash Equivalents and Short-Term Investments | 709.10M | 843.90M | 482.20M | 680.50M | 861.10M | 832.00M |
| Total Debt | 3.35B | 3.38B | 3.23B | 3.44B | 3.54B | 3.82B |
| Total Liabilities | 4.56B | 4.57B | 4.34B | 4.71B | 4.59B | 4.78B |
| Stockholders Equity | 2.99B | 3.85B | 2.98B | 2.78B | 2.61B | 2.66B |
Cash Flow | ||||||
| Free Cash Flow | -124.70M | 42.40M | 438.60M | 545.40M | 625.60M | 475.50M |
| Operating Cash Flow | 345.90M | 505.60M | 639.60M | 722.60M | 809.00M | 695.80M |
| Investing Cash Flow | -391.60M | 90.40M | -348.40M | -583.00M | -192.10M | -114.70M |
| Financing Cash Flow | -160.50M | -242.20M | -487.20M | -335.00M | -581.30M | -1.20B |
Eutelsat Communications Technical Analysis
Positive
3.42
Price Trends
3.39
Positive
3.57
Negative
3.30
Positive
Market Momentum
0.09
Negative
52.96
Neutral
40.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:ETL, the sentiment is Positive. The current price of 3.42 is above the 20-day moving average (MA) of 3.03, above the 50-day MA of 3.39, and above the 200-day MA of 3.30, indicating a bullish trend. The MACD of 0.09 indicates Negative momentum. The RSI at 52.96 is Neutral, neither overbought nor oversold. The STOCH value of 40.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FR:ETL.
Eutelsat Communications Peers Comparison
Overall Rating
UnderperformOutperform
Sector (69)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | ¥229.55B | 14.48 | 7.64% | 2.71% | 9.13% | 8.50% | |
54 Neutral | $1.67B | ― | -28.35% | ― | 10.31% | -494.84% | |
| €57.41M | ― | -15.03% | ― | ― | ― | ||
| €121.77M | ― | -6.01% | ― | ― | ― | ||
| €32.69M | 17.12 | 7.81% | 5.06% | ― | ― | ||
| €295.98M | ― | -18.17% | ― | ― | ― | ||
| €24.77M | ― | ― | ― | ― |
* Technology Sector Average
Performance Comparison
FR:ETL
Eutelsat Communications
3.43
-0.57
-14.20%
GB:0QVW
Ateme SA
4.60
-1.30
-22.03%
GB:0QSV
Ekinops
4.49
0.97
27.56%
GB:0N9W
Netgem SA
1.00
0.23
29.87%
GB:0OPY
Parrot SA
9.46
7.48
377.78%
FR:ALBPK
Broadpeak SA
1.93
-0.37
-16.09%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.