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Eutelsat Communications (FR:ETL)
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Eutelsat Communications
(OTC:ETL)
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Rating:39Underperform
Price Target:
€1.50
▼(-59.46% Downside)
Eutelsat Communications is facing significant financial and technical challenges. The company's declining revenues, high leverage, and negative profitability are major concerns. Additionally, the stock's bearish momentum and poor valuation metrics further contribute to a low overall score. Strategic improvements are necessary to enhance financial stability and investor confidence.
Positive Factors
Strong Gross Profit Margin
A strong gross profit margin indicates efficient cost management and pricing power, which can support long-term profitability despite current challenges.
Stable Income from Long-term Contracts
Long-term contracts offer predictable revenue streams, enhancing financial stability and allowing for better strategic planning.
High Demand for Satellite Services
Increasing demand for satellite services in underserved areas supports future growth opportunities and market expansion.
Negative Factors
Declining Revenue Growth
Declining revenue growth reflects challenges in maintaining market share and competitiveness, potentially impacting long-term business viability.
High Leverage
High leverage increases financial risk and limits flexibility, potentially hindering the company's ability to invest in growth opportunities.
Negative Profitability
Negative profitability suggests operational inefficiencies and financial distress, which may require significant restructuring to achieve sustainable growth.
Eutelsat Communications (ETL) vs. iShares MSCI France ETF (EWQ)
Market Cap
€2.26B
Dividend YieldN/A
Average Volume (3M)2.81M
Price to Earnings (P/E)―
Beta (1Y)0.67
Revenue Growth2.53%
EPS Growth-192.58%
CountryFR
Employees1,514
SectorTechnology
Sector Strength88
IndustryCommunication Equipment
Share Statistics
EPS (TTM)-0.34
Shares Outstanding1,178,308,100
10 Day Avg. Volume1,439,416
30 Day Avg. Volume2,807,419
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)0.68
Price to Sales (P/S)1.42
P/FCF Ratio-314.53
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€2.80Price Target Upside-24.30% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering2
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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 generates revenue primarily through the leasing of satellite capacity to telecommunications operators, broadcasters, and internet service providers. Its core revenue streams include fixed and mobile broadband services, video broadcasting services, and data services. The company also benefits from long-term contracts with key clients, which provide stable income. Additionally, Eutelsat engages in partnerships with technology providers and telecom companies to expand its service offerings and improve customer reach. Factors contributing to its earnings include the growing demand for high-speed internet access, particularly in rural and underserved markets, and the increasing reliance on satellite technology for broadcasting and communication services.
Eutelsat Communications Earnings Call Summary
Earnings Call Date:Feb 14, 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 faces significant financial challenges, with declining revenues, high leverage, and negative profitability. While the company maintains a strong gross profit margin, the overall financial health is weakened by substantial losses and cash flow issues. The high debt levels pose additional risks, requiring strategic adjustments to improve financial stability and performance.Income Statement
Eutelsat Communications has experienced declining revenue growth, with a significant drop of 23.3% in the latest year. The gross profit margin remains strong at 80.56%, but the net profit margin is deeply negative at -86.99%, indicating substantial losses. The EBIT margin is also negative, reflecting operational challenges. Despite a decent EBITDA margin of 48.22%, the overall profitability is concerning.Balance Sheet
The company has a high debt-to-equity ratio of 1.22, indicating significant leverage. Return on equity is negative at -41.71%, reflecting poor returns for shareholders. The equity ratio stands at 37.08%, suggesting moderate financial stability but potential risks due to high leverage.Cash Flow
Free cash flow has drastically declined by 95.51%, and the free cash flow to net income ratio is negative, highlighting cash flow challenges. The operating cash flow to net income ratio is 0.33, indicating limited cash generation relative to net losses.| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.24B | 1.24B | 1.21B | 1.13B | 1.15B | 1.23B |
| Gross Profit | 627.30M | 1.00B | 1.01B | 572.50M | 1.06B | 1.14B |
| EBITDA | 500.80M | 599.70M | 525.80M | 1.08B | 911.80M | 833.00M |
| Net Income | -1.08B | -1.08B | -309.90M | 314.90M | 230.80M | 214.10M |
Balance Sheet | ||||||
| Total Assets | 7.00B | 7.00B | 8.52B | 7.41B | 7.57B | 7.28B |
| Cash, Cash Equivalents and Short-Term Investments | 574.60M | 574.60M | 843.90M | 482.20M | 680.50M | 861.10M |
| Total Debt | 3.17B | 3.17B | 3.38B | 3.23B | 3.44B | 3.54B |
| Total Liabilities | 4.34B | 4.34B | 4.57B | 4.34B | 4.71B | 4.59B |
| Stockholders Equity | 2.59B | 2.59B | 3.85B | 2.98B | 2.78B | 2.61B |
Cash Flow | ||||||
| Free Cash Flow | -72.80M | -5.60M | 42.40M | 438.60M | 545.40M | 625.60M |
| Operating Cash Flow | 315.90M | 383.10M | 505.60M | 639.60M | 722.60M | 809.00M |
| Investing Cash Flow | -410.10M | -410.10M | 90.40M | -348.40M | -583.00M | -192.10M |
| Financing Cash Flow | -113.20M | -113.20M | -242.20M | -487.20M | -335.00M | -581.30M |
Eutelsat Communications Technical Analysis
Neutral
3.70
Price Trends
2.17
Negative
2.38
Negative
2.54
Negative
Market Momentum
-0.09
Negative
47.55
Neutral
83.22
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:ETL, the sentiment is Neutral. The current price of 3.7 is above the 20-day moving average (MA) of 1.82, above the 50-day MA of 2.17, and above the 200-day MA of 2.54, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 47.55 is Neutral, neither overbought nor oversold. The STOCH value of 83.22 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FR:ETL.
Eutelsat Communications Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | €25.61M | 17.12 | 6.35% | 6.46% | ― | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
53 Neutral | €56.77M | -6.31 | -7.69% | ― | 1.56% | -910.94% | |
52 Neutral | €79.22M | -190.53 | -1.34% | ― | 3.26% | 95.41% | |
49 Neutral | €252.47M | -18.46 | -37.49% | ― | 26.59% | 32.48% | |
45 Neutral | €27.59M | -26.35 | ― | ― | 15.01% | 79.05% | |
39 Underperform | €2.26B | -1.08 | -32.71% | ― | 2.53% | -192.58% |
* Technology Sector Average
FR:ETL
Eutelsat Communications
1.92
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22.51%
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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.