Spark New Zealand (SPKKY) AI Stock Analysis

• Market Cap: $2.48B
• Dividend Yield: 19.27%
• Average Volume (3M): 4.39K
• Price to Earnings (P/E): 15.8
• Beta (1Y): 0.31
• Revenue Growth: -5.97%
• EPS Growth: -21.81%
• Country: US
• Employees: 4,884
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): 0.27
• Shares Outstanding: 378,021,850
• 10 Day Avg. Volume: 2,432
• 30 Day Avg. Volume: 4,390
• PEG Ratio: -0.96
• Price to Book (P/B): 2.91
• Price to Sales (P/S): 1.22
• P/FCF Ratio: 18.44
• Enterprise Value/Market Cap: 1.67
• Enterprise Value/Revenue: 1.13
• Enterprise Value/Gross Profit: 4.86
• Enterprise Value/Ebitda: 4.06
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: $7.00 ▲(6.54% 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 Business Overview & Revenue Model

Company Description

Spark 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 Money

Spark 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 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.

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.

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.

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

• Technical Analysis Sentiment: Negative
• Last Price: 6.57
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPKKY, the sentiment is Negative. The current price of 6.57 is above the 20-day moving average (MA) of 6.53, below the 50-day MA of 6.63, and below the 200-day MA of 6.59, indicating a bearish trend. The MACD of -0.02 indicates Negative momentum. The RSI at 48.96 is Neutral, neither overbought nor oversold. The STOCH value of 17.94 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SPKKY.

Spark New Zealand Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PHI	77 Outperform	$4.63B	9.17	25.22%	7.78%	0.59%	8.86%
VEON	75 Outperform	$3.65B	5.66	48.17%	―	6.42%	―
TLK	75 Outperform	$20.49B	15.62	15.54%	6.14%	-5.21%	-7.45%
SPKKY	66 Neutral	$2.48B	15.79	15.54%	19.27%	-5.97%	-21.81%
TEO	61 Neutral	$5.16B	-32.94	-2.95%	0.40%	15.38%	-292.52%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
TEF	45 Neutral	$22.92B	-10.35	-0.70%	7.47%	-5.49%	-75.51%

Spark New Zealand Corporate Events

Spark New Zealand Earnings Call: Mixed Sentiments and Strategic Moves

The recent earnings call of Spark New Zealand Limited unveiled a mixed sentiment, highlighting both strategic successes and ongoing challenges. While the company celebrated achievements in divestments and cost reductions, it also faced significant hurdles with declining revenue and profitability in its core services. The management emphasized their focus on stabilizing performance and repositioning for future growth.

Spark New Zealand Faces Challenges, Plans Strategic Shift

Spark New Zealand Limited is the largest telecommunications company in New Zealand, providing mobile, broadband, digital services, and digital infrastructure to a wide range of customers including individuals, businesses, and government entities. In its latest earnings report for FY25, Spark New Zealand faced a challenging year marked by economic headwinds and structural changes in the market, resulting in a decrease in several key financial metrics. The company reported a 2.5% decrease in operating revenues to $3,725 million and a 17.7% decrease in net earnings to $260 million. Despite these challenges, Spark has made strategic moves to stabilize its performance, including divesting non-core assets and entering into a partnership to enhance its data center business. Looking forward, Spark’s management is focused on returning to growth by refocusing on its core connectivity services and implementing a new five-year strategy aimed at delivering stable returns and improving shareholder value.