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Eutelsat Communications (FR:ETL)
:ETL
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Eutelsat Communications
(OTC:ETL)
Rating:52Neutral
Price Target:
€3.50
▲(15.13% Upside)
Positive Factors
Debt Costs
Debt costs have fallen materially, impacting Eutelsat shares positively.
Financial Performance
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
There are rising competitive pressures from global satellite players, including Starlink.
Execution Risks
Eutelsat faces competitive pressures, rising debt, and execution risks that downgrade its stock rating.
Valuation Risks
The company's shares have declined significantly, yet further downside potential remains due to competitive risks.
Eutelsat Communications (ETL) vs. iShares MSCI France ETF (EWQ)
Market Cap
$1.44B
Dividend YieldN/A
Average Volume (3M)1.18M
Price to Earnings (P/E)―
Beta (1Y)0.63
Revenue Growth2.53%
EPS Growth-192.60%
CountryFR
Employees1,514
SectorTechnology
Sector Strength85
IndustryCommunication Equipment
Share Statistics
EPS (TTM)-0.44
Shares Outstanding475,178,380
10 Day Avg. Volume726,012
30 Day Avg. Volume1,179,323
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap3.08
Enterprise Value/Revenue3.56
Enterprise Value/Gross Profit4.40
Enterprise Value/Ebitda7.37
Forecast
1Y Price Target
$3.75Price Target Upside23.28% Upside
Rating ConsensusHold
Number of Analyst Covering4
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 primarily through the leasing of satellite bandwidth and services. Its key revenue streams include video applications, which encompass satellite TV broadcasting for direct-to-home (DTH) services, and data services, which provide broadband connectivity and backhaul solutions for telecommunications operators and internet service providers. Eutelsat also earns income from government services by offering secure and robust communication solutions for military and governmental needs. Strategic partnerships and long-term contracts with major broadcasters and telecom companies significantly contribute to Eutelsat's earnings, along with its continuous investment in expanding and modernizing its satellite fleet to meet increasing demand for high-quality communication services worldwide.
Eutelsat Communications Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Feb 13, 2026
Earnings Call Sentiment Neutral
The earnings call presented a balanced view, with notable achievements in revenue growth in specific segments and strategic advancements in LEO infrastructure. However, significant challenges were highlighted, particularly in the GEO segment, with a substantial goodwill impairment and increased net loss. The outlook for GEO consumer broadband remains uncertain, adding to the cautious tone of the call.Q2-2025 Updates
Positive Updates
Growth in Operating Verticals Revenue
Operating vertical revenues reached €600 million, showing an increase of 3.9% year-on-year. Fixed Connectivity and Government Services segments rose by 22% each.
SpaceRISE Consortium and Iris2 Contract
Eutelsat signed the agreement with the SpaceRISE consortium to design, build, and operate the Iris2 multi-orbit constellation, marking a significant step in its LEO build-out strategy.
Lower CapEx Expectations
Gross CapEx is now expected to be between €500 million and €600 million, down from the initially guided €700 million to €800 million, due to timing of LEO investments and increased vigilance on GEO expenditures.
Significant Contract Wins
New multiyear agreements signed with Q-KON and NIGCOMSAT to expand LEO satellite services across Sub-Saharan Africa and Nigeria.
Successful Partnership for Infrastructure
Eutelsat exercised the put option with the EQT Infrastructure fund for the sale of a majority stake in its passive ground infrastructure, expected to deliver net proceeds of around €500 million.
Negative Updates
Goodwill Impairment on GEO Assets
A goodwill impairment of €535 million was recorded for GEO assets due to lower expected future cash flows.
Decline in Video Revenue
Video segment revenues, representing 51% of the total, declined by 6.4% year-on-year, in line with broader secular market declines.
Increased Net Loss
Group share of net income was a loss of €873.2 million, significantly up from a loss of €191.3 million a year earlier, due to higher operating expenses and goodwill impairment.
Challenges with GEO Consumer Broadband
Difficult conditions for GEO consumer broadband in Europe, with a temporary stop of revenue recognition from a specific customer on the KONNECT VHTS satellite.
Rising Net Debt
Net debt increased to €2,695.8 million, with a net debt-to-adjusted EBITDA ratio rising to 3.92 from 3.79.
Company Guidance
During the Eutelsat Group's second quarter and first half 2024-2025 results call, several key financial metrics and strategic initiatives were highlighted. The company reported total revenues of €606 million, reflecting a 5.9% increase on a reported basis and 4.4% like-for-like. Operating vertical revenues rose by 3.9% to €600 million, while the adjusted EBITDA margin was stable at 55.2%. Despite a goodwill impairment of €535 million on GEO assets, Eutelsat confirmed its full-year revenue and EBITDA margin objectives. The company's net debt to adjusted EBITDA ratio rose to 3.92. Capital expenditures are projected to be lower than initially guided, expected between €500 million and €600 million. Strategically, Eutelsat advanced its LEO build-out with the SpaceRISE consortium's Iris2 constellation, planning to invest around €2 billion towards its completion. The Iris2 project is valued at €10.6 billion, with public funding covering 60% of the cost. Additionally, the company exercised a put option for the sale and leaseback of passive ground infrastructure, expected to generate €500 million in net proceeds in 2026.Eutelsat Communications Financial Statement Overview
Summary
Eutelsat Communications is facing challenges with declining revenue and profitability. Despite a strong gross profit margin, operating inefficiencies have eroded income margins. The balance sheet is moderately leveraged, providing some stability, but cash flow growth has slowed.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 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.21B | 1.13B | 1.15B | 1.23B | 1.28B |
| Gross Profit | 1.01B | 572.50M | 1.06B | 1.14B | 657.70M |
| EBITDA | 525.80M | 1.08B | 911.80M | 833.00M | 1.05B |
| Net Income | -309.90M | 314.90M | 230.80M | 214.10M | 297.60M |
Balance Sheet | |||||
| Total Assets | 8.52B | 7.41B | 7.57B | 7.28B | 7.58B |
| Cash, Cash Equivalents and Short-Term Investments | 843.90M | 482.20M | 680.50M | 861.10M | 832.00M |
| Total Debt | 3.38B | 3.23B | 3.44B | 3.54B | 3.82B |
| Total Liabilities | 4.57B | 4.34B | 4.71B | 4.59B | 4.78B |
| Stockholders Equity | 3.85B | 2.98B | 2.78B | 2.61B | 2.66B |
Cash Flow | |||||
| Free Cash Flow | 42.40M | 438.60M | 545.40M | 625.60M | 475.50M |
| Operating Cash Flow | 505.60M | 639.60M | 722.60M | 809.00M | 695.80M |
| Investing Cash Flow | 90.40M | -348.40M | -583.00M | -192.10M | -114.70M |
| Financing Cash Flow | -242.20M | -487.20M | -335.00M | -581.30M | -1.20B |
Eutelsat Communications Technical Analysis
Negative
3.04
Price Trends
3.33
Negative
3.41
Negative
3.20
Negative
Market Momentum
-0.05
Negative
41.81
Neutral
46.57
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:ETL, the sentiment is Negative. The current price of 3.04 is below the 20-day moving average (MA) of 3.14, below the 50-day MA of 3.33, and below the 200-day MA of 3.20, indicating a bearish trend. The MACD of -0.05 indicates Negative momentum. The RSI at 41.81 is Neutral, neither overbought nor oversold. The STOCH value of 46.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:ETL.
Eutelsat Communications Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $35.62B | 8.22 | -10.94% | 1.88% | 8.86% | -10.36% | |
52 Neutral | $1.44B | ― | -32.71% | ― | 2.53% | -192.60% | |
| ― | €68.34M | ― | -15.03% | ― | ― | ― | |
| ― | €87.45M | ― | -7.69% | ― | ― | ― | |
| ― | €31.17M | 20.80 | 6.35% | ― | ― | ― | |
| ― | €271.04M | ― | -37.51% | ― | ― | ― | |
50 Neutral | €21.45M | ― | ― | 0.87% | 5.12% |
* Technology Sector Average
Performance Comparison
FR:ETL
Eutelsat Communications
3.04
-1.15
-27.48%
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-6.90%
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0.92
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24.32%
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8.76
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FR:ALBPK
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1.87
-0.05
-2.60%
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.