Spark New Zealand Limited (SPKKY)
OTHER OTC:SPKKY
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Spark New Zealand
(OTC:SPKKY)
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Rating:69Neutral
Price Target:
$7.00
▲(4.17% Upside)
Action:ReiteratedDate:02/18/26
The score is driven primarily by solid financial performance (cash flow strength despite revenue decline) and a constructive earnings update with reaffirmed guidance and balance-sheet improvement. These positives are tempered by weak technical momentum (below major moving averages and negative MACD) and the risk implied by high leverage, while valuation is supported by a moderate P/E and very high dividend yield.
Positive Factors
Free cash flow improvement
Material FCF growth and solid cash conversion indicate the business now generates durable internal funding for reinvestment, dividends and debt reduction. Higher cash conversion cushions cyclical revenue weakness and supports execution of SPK‑30 without relying heavily on external financing.
Negative Factors
Declining revenue trend
Persistent revenue decline erodes operating leverage and limits long‑term margin expansion. Structural downgrades from legacy lines and lower‑ARPU migrations mean management must replace lost topline via higher growth segments or sustained cost and product repositioning to restore growth.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow improvement
Material FCF growth and solid cash conversion indicate the business now generates durable internal funding for reinvestment, dividends and debt reduction. Higher cash conversion cushions cyclical revenue weakness and supports execution of SPK‑30 without relying heavily on external financing.
Read all positive factors
Spark New Zealand (SPKKY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.41B
Dividend Yield19.27%
Average Volume (3M)4.39K
Price to Earnings (P/E)16.6
Beta (1Y)0.37
Revenue Growth-5.97%
EPS Growth-21.81%
CountryUS
Employees4,884
SectorCommunication Services
Sector Strength97
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.12
Shares Outstanding378,026,030
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 Cap2.92
Enterprise Value/Revenue1.96
Enterprise Value/Gross Profit10.60
Enterprise Value/Ebitda6.53
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.37
Revenue Forecast (FY)$2.19B
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 serv...
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...
Spark New Zealand Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 21, 2026
Earnings Call Sentiment Positive
The call conveys an overall positive tone driven by a clear step‑up in profitability (EBITDAI +5.1%), strong improvements in NPAT (+30.4%) and free cash flow (+84%), successful completion of the data center transaction that materially strengthens the balance sheet, and tangible operational gains in mobile, network performance and customer satisfaction. Offsetting these positives are revenue pressures in legacy and IT services lines (notably service management -19.7%, voice -16.7%, other connectivity -10.4%), ongoing migration to lower‑ARPU products, and some normalization/timing risks in cash tax and FCF. Management reaffirmed FY26 guidance and signalled continued cost discipline and strategic focus under SPK‑30, but execution risks remain in parts of the portfolio.Positive Updates
Improved Profitability (Adjusted EBITDAI)
Adjusted EBITDAI of $471 million, up 5.1% year‑on‑year, driven by mobile momentum and disciplined cost‑out execution.
Negative Updates
Adjusted Revenue Decline
Adjusted revenue of $1.917 billion was down 1.1% (≈ $22 million), with roughly $10 million attributable to the prior divestment of Digital Island and the remainder driven by muted business project spending and legacy voice declines.
Read all updates
Q2-2026 Updates
Positive
Negative
Improved Profitability (Adjusted EBITDAI)
Adjusted EBITDAI of $471 million, up 5.1% year‑on‑year, driven by mobile momentum and disciplined cost‑out execution.
Read all positive updates
Company Guidance
Guidance for FY‑26 was reaffirmed and detailed: adjusted EBITDAI guidance of $1,010m–$1,070m (midpoint $1,040m) implying a normal H1/H2 split of ~45/55; free cash flow guidance of $290m–$330m; BAU CapEx guidance of $380m–$410m (H1 BAU CapEx $217m, H2 implied $163m–$193m) and updated strategic CapEx of $55m (H1 strategic spend $54m + $1m in January); interim dividend of $0.08 per share, 50% imputed; FY‑26 cost‑out target narrowed to $40m–$50m (H1 delivered $51m net savings including $55m labor and $12m product savings offset by $16m other OpEx); H1 operational/financial baselines to note that underpin guidance include adjusted revenue $1.917bn (‑1.1% y/y), adjusted EBITDAI $471m (+5.1% y/y), adjusted NPAT $73m (+30.4% y/y), free cash flow H1 $107m (+84% y/y), total CapEx H1 $271m; balance sheet actions supporting guidance: initial data‑centre cash proceeds ~$453m (plus up to $98m deferred) which pro forma reduces net debt ex‑leases from $1.39bn (‑5% since 30‑Jun‑25) to ~ $940m and net‑debt/EBITDAI from 2.2x to ~1.7x, IFP receivable sale $240m (growth in IFP book ~$27m), expected full‑year other asset sale gains ~ $30m (H1 $24m), and healthy interest cover ~8x.Spark New Zealand Financial Statement Overview
Summary
Income Statement
65
Positive
Balance Sheet
70
Positive
Cash Flow
75
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.60B | 3.62B | 3.76B | 3.88B | 3.69B | 3.56B |
| Gross Profit | 664.31M | 1.81B | 1.94B | 2.01B | 1.94B | 1.89B |
| EBITDA | 1.08B | 1.03B | 1.10B | 1.75B | 1.18B | 908.00M |
| Net Income | 289.82M | 260.00M | 316.00M | 1.14B | 410.00M | 384.00M |
Balance Sheet | ||||||
| Total Assets | 4.38B | 4.53B | 4.63B | 4.48B | 4.19B | 4.11B |
| Cash, Cash Equivalents and Short-Term Investments | 84.90M | 34.00M | 59.00M | 100.00M | 71.00M | 72.00M |
| Total Debt | 3.04B | 2.35B | 2.36B | 1.86B | 1.87B | 1.91B |
| Total Liabilities | 3.02B | 3.00B | 3.04B | 2.54B | 2.71B | 2.61B |
| Stockholders Equity | 1.35B | 1.52B | 1.59B | 1.94B | 1.48B | 1.50B |
Cash Flow | ||||||
| Free Cash Flow | 584.97M | 240.00M | 164.00M | 310.00M | 408.00M | 461.00M |
| Operating Cash Flow | 1.01B | 680.00M | 764.00M | 791.00M | 833.00M | 847.00M |
| Investing Cash Flow | -94.70M | -112.00M | -550.00M | 425.00M | -492.00M | -388.00M |
| Financing Cash Flow | -930.28M | -593.00M | -255.00M | -1.20B | -350.00M | -451.00M |
Spark New Zealand Technical Analysis
Positive
6.72
Price Trends
6.34
Positive
6.34
Positive
6.57
Negative
Market Momentum
-0.09
Negative
58.44
Neutral
81.45
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 6.15, above the 50-day MA of 6.34, and above the 200-day MA of 6.57, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 58.44 is Neutral, neither overbought nor oversold. The STOCH value of 81.45 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 | $18.46B | 16.17 | 15.56% | 6.14% | -5.21% | -7.45% | |
69 Neutral | $2.41B | 16.56 | 15.54% | 19.27% | -5.97% | -21.81% | |
64 Neutral | $4.67B | 9.02 | 24.66% | 7.78% | 0.59% | 8.86% | |
62 Neutral | $3.52B | 6.97 | 40.63% | ― | 6.42% | ― | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
60 Neutral | $5.30B | -36.64 | -2.67% | 0.40% | 15.38% | -292.52% |
* Communication Services Sector Average
SPKKY
Spark New Zealand
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15.75%
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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.