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Spark New Zealand Limited (SPKKY)
OTHER OTC:SPKKY
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Spark New Zealand
(OTC:SPKKY)
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Rating:66Neutral
Price Target:
$7.00
▲(4.17% Upside)
Spark New Zealand's overall stock score reflects stable financial performance and attractive valuation, offset by bearish technical indicators and mixed earnings call results. The company's strong cash flow generation and high dividend yield are significant positives, while revenue decline and operational challenges pose risks.
Positive Factors
Strong Mobile Market Position
Maintaining a leading position in mobile services with ARPU growth indicates strong market presence and potential for sustained revenue from this segment.
Improved Free Cash Flow Management
Strong cash flow management and reduced CapEx enhance financial flexibility, supporting long-term investments and shareholder returns.
Cost Reduction Achievements
Significant cost reductions improve operational efficiency and profitability, providing a buffer against revenue pressures.
Negative Factors
Decline in Adjusted Financial Results
Declining revenue and EBITDAI indicate challenges in maintaining growth and profitability, affecting long-term financial health.
Broadband Connection Decline
A decline in broadband connections reflects competitive pressures and challenges in retaining customers, impacting future revenue streams.
Significant Adjusted NPAT Decline
A sharp decline in NPAT suggests increased financial strain, limiting the company's ability to reinvest in growth initiatives.
Spark New Zealand (SPKKY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.57B
Dividend Yield19.27%
Average Volume (3M)4.39K
Price to Earnings (P/E)16.2
Beta (1Y)0.30
Revenue Growth-5.97%
EPS Growth-21.81%
CountryUS
Employees4,884
SectorCommunication Services
Sector Strength97
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.27
Shares Outstanding378,021,850
10 Day Avg. Volume2,432
30 Day Avg. Volume4,390
Financial Highlights & Ratios
PEG Ratio-0.96
Price to Book (P/B)2.91
Price to Sales (P/S)1.22
P/FCF Ratio18.44
Enterprise Value/Market Cap2.62
Enterprise Value/Revenue1.85
Enterprise Value/Gross Profit7.93
Enterprise Value/Ebitda6.62
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Spark New Zealand Business Overview & Revenue Model
Company DescriptionSpark New Zealand Limited, together with its subsidiaries, provides telecommunications and digital services in New Zealand. It offers telecommunications, information technology, media, and other digital products and services, including mobile services; voice services; broadband services; internet sports streaming services; cloud, security, and service. The company also provides IT infrastructure, business cloud, business and outsourced telecommunications, software, big data analytics, data center, and international wholesale telecommunications services. In addition, it offers local, national, and international telephone and data services; finance products; group insurance products; and mobile phone repair services. Further, the company retails telecommunications products and services; and distributes equipment. It serves consumers, households, small businesses, government, and large enterprises. The company was formerly known as Telecom Corporation of New Zealand Limited and changed its name to Spark New Zealand Limited in August 2014. Spark New Zealand Limited was incorporated in 1987 and is headquartered in Auckland, New Zealand.
How the Company Makes MoneySpark New Zealand generates revenue through multiple streams, primarily from its telecommunications services, which include mobile phone plans, fixed-line broadband subscriptions, and business communication solutions. The company charges customers for monthly service fees, data usage, and additional value-added services. Key revenue streams also include the sale of devices, such as smartphones and routers, along with enterprise solutions that encompass cloud services and cybersecurity offerings tailored for businesses. Furthermore, Spark New Zealand engages in strategic partnerships with technology providers and content creators, enhancing its service offerings and customer engagement, thus contributing to its overall earnings.
Spark New Zealand Earnings Call Summary
Earnings Call Date:Aug 19, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Feb 27, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with notable successes in strategic divestments and cost reductions, but significant challenges remain with declining revenue and profitability in core services. The company is focusing on stabilizing its performance and repositioning for future growth.Q4-2025 Updates
Positive Updates
Successful Data Center Business Transaction
Spark New Zealand reached an agreement to sell a 75% stake in its data center business to Pacific Equity Partners, valuing the business up to NZD 705 million, providing initial proceeds of around NZD 486 million, and allowing Spark to focus its capital investment on core connectivity business.
Cost Reduction Achievements
Delivered NZD 85 million in cost reductions in H2 '25 compared to H2 '24, including a NZD 61 million year-on-year reduction in labor costs and NZD 20 million in product costs.
Strong Mobile Market Position
Spark remains the market leader in mobile services with ongoing ARPU growth expected through price increases and new product developments.
Improved Free Cash Flow Management
Free cash flow remained steady at NZD 330 million, with a focus on reducing CapEx by 17.2% to NZD 429 million to offset earnings decline.
Negative Updates
Decline in Adjusted Financial Results
Adjusted revenue declined 4.2% to NZD 3.7 billion and adjusted EBITDAI declined 8.9% to NZD 1.06 billion, driven by lower IT services project activity and a mix shift from private to public cloud.
Significant Adjusted NPAT Decline
Adjusted NPAT declined 33.6% to NZD 227 million due to lower EBITDA and higher depreciation and amortization costs.
Mobile Service Revenue Challenges
Total mobile service revenues declined 2.3%, impacted by price competition in key segments and nonrecurring impacts.
Broadband Connection Decline
Broadband connections declined 3.8% in a competitive market, showing ongoing challenges in maintaining customer base.
Company Guidance
During the Spark New Zealand FY '25 results call, CEO Jolie Hodson and CFO Stewart Taylor provided comprehensive guidance on the company's financial performance and strategic direction. For the fiscal year ending June 30, 2025, Spark reported an adjusted revenue decline of 4.2% to NZD 3.7 billion and a decrease in adjusted EBITDAI by 8.9% to NZD 1.06 billion. This was attributed to reduced IT services activity, a shift from private to public cloud, and legacy voice decline, partially offset by substantial labor cost reductions under Spark's transformation program. The company declared a second-half FY '25 dividend of NZD 0.125 per share, resulting in a total FY '25 dividend of NZD 0.25 per share, aligning with updated guidance. Free cash flow was stable at NZD 330 million, with CapEx reduced by 17.2% to NZD 429 million. For FY '26, Spark anticipates EBITDAI between NZD 1,020 million and NZD 1,080 million, maintaining a BAU CapEx range of NZD 380 million to NZD 410 million, with a 100% payout ratio of free cash flow to dividends, emphasizing a strategic focus on core connectivity and efficiency improvements. The guidance reflects Spark's efforts to adapt in a challenging economic environment, aiming for stable returns and shareholder value through strategic capital management and transformation initiatives.Spark New Zealand Financial Statement Overview
Summary
Spark New Zealand demonstrates stable profitability and cash flow generation, despite facing revenue growth challenges. The company is highly leveraged, which could pose risks in a volatile market environment. However, its ability to generate cash and maintain profitability provides a solid foundation for future growth.Income Statement
Spark New Zealand's income statement shows a declining revenue trend with a negative growth rate of -5.7% in the latest year. Despite this, the company maintains a stable gross profit margin around 50%, and a modest net profit margin of 7.18%. The EBIT and EBITDA margins have decreased over the years, indicating potential challenges in operational efficiency.65
Positive
Balance Sheet
The balance sheet reflects a high debt-to-equity ratio of 1.55, suggesting significant leverage. However, the company has a reasonable return on equity of 17.11%, indicating effective use of equity to generate profits. The equity ratio is moderate, showing a balanced asset structure.70
Positive
Cash Flow
Cash flow analysis reveals a strong free cash flow growth rate of 39.54% in the latest year, indicating improved cash generation. The operating cash flow to net income ratio is 0.64, showing adequate cash flow relative to net income. The free cash flow to net income ratio of 0.35 suggests a healthy conversion of profits into cash.75
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.65B | 3.62B | 3.76B | 3.88B | 3.69B | 3.56B |
| Gross Profit | 851.00M | 1.81B | 1.94B | 2.01B | 1.94B | 1.89B |
| EBITDA | 1.02B | 1.03B | 1.10B | 1.75B | 1.18B | 908.00M |
| Net Income | 260.00M | 260.00M | 316.00M | 1.14B | 410.00M | 384.00M |
Balance Sheet | ||||||
| Total Assets | 4.53B | 4.53B | 4.63B | 4.48B | 4.19B | 4.11B |
| Cash, Cash Equivalents and Short-Term Investments | 34.00M | 34.00M | 59.00M | 100.00M | 71.00M | 72.00M |
| Total Debt | 2.35B | 2.35B | 2.36B | 1.86B | 1.87B | 1.91B |
| Total Liabilities | 3.00B | 3.00B | 3.04B | 2.54B | 2.71B | 2.61B |
| Stockholders Equity | 1.52B | 1.52B | 1.59B | 1.94B | 1.48B | 1.50B |
Cash Flow | ||||||
| Free Cash Flow | 233.00M | 240.00M | 164.00M | 310.00M | 408.00M | 461.00M |
| Operating Cash Flow | 677.00M | 680.00M | 764.00M | 791.00M | 833.00M | 847.00M |
| Investing Cash Flow | -109.00M | -112.00M | -550.00M | 425.00M | -492.00M | -388.00M |
| Financing Cash Flow | -593.00M | -593.00M | -255.00M | -1.20B | -350.00M | -451.00M |
Spark New Zealand Technical Analysis
Positive
6.72
Price Trends
6.53
Positive
6.76
Negative
6.67
Positive
Market Momentum
0.03
Negative
59.09
Neutral
96.05
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPKKY, the sentiment is Positive. The current price of 6.72 is above the 20-day moving average (MA) of 6.58, above the 50-day MA of 6.53, and above the 200-day MA of 6.67, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 59.09 is Neutral, neither overbought nor oversold. The STOCH value of 96.05 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SPKKY.
Spark New Zealand Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $4.89B | 9.44 | 25.22% | 7.78% | 0.59% | 8.86% | |
75 Outperform | $3.77B | 5.84 | 53.38% | ― | 6.42% | ― | |
75 Outperform | $21.35B | 16.11 | 15.54% | 6.14% | -5.21% | -7.45% | |
66 Neutral | $2.57B | 16.17 | 15.54% | 19.27% | -5.97% | -21.81% | |
61 Neutral | $4.93B | -31.95 | -2.95% | 0.40% | 15.38% | -292.52% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
45 Neutral | $21.93B | -9.86 | -0.70% | 7.47% | -5.49% | -75.51% |
* Communication Services Sector Average
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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.