Telesat Corp (TSAT) AI Stock Analysis

• Market Cap: C$583.89M
• Dividend Yield: N/A
• Average Volume (3M): 33.32K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.27
• Revenue Growth: -25.79%
• EPS Growth: -413.48%
• Country: US
• Employees: 610
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): -2.38
• Shares Outstanding: 14,695,331
• 10 Day Avg. Volume: 63,126
• 30 Day Avg. Volume: 33,317
• PEG Ratio: 0.02
• Price to Book (P/B): 0.46
• Price to Sales (P/S): 0.58
• P/FCF Ratio: -137.68
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): -9.66
• Revenue Forecast (FY): C$345.41M

• Rating: 44 Neutral
• Price Target: C$40.00 ▲(11.42% Upside)

The score is primarily held down by weak financial performance (declining revenue, ongoing losses, high leverage, and poor cash generation). Technicals are mixed with modest longer-term improvement but limited near-term momentum, while valuation is constrained by a negative P/E. The earnings call adds some support via reaffirmed guidance and Lightspeed progress, but recent revenue/expense trends and the net loss remain key risks.

Positive Factors

High Gross Margin

An 85% gross margin reflects structural pricing power on satellite capacity and services, indicating that core service economics are strong. This high margin base supports eventual operating leverage as revenue stabilizes and can sustain long-term profitability once fixed costs are absorbed.

Progress on Lightspeed LEO

Advancing the Lightspeed LEO program represents a durable strategic shift to lower-latency, high-throughput connectivity. Successful deployment expands addressable markets (mobility, enterprise, government) and creates a recurring managed-services revenue stream that can materially improve long-term growth.

Debt Reduction & Interest Savings

Material debt repurchases and related interest savings materially lower recurring financing costs. Reduced interest burden improves cash flow conversion and financial flexibility, easing funding of Lightspeed capex and lowering refinancing risk over the medium term.

Negative Factors

High Financial Leverage

A debt-to-equity ratio near 4.7 signals persistent high leverage, increasing vulnerability to interest rate moves and operational shocks. Heavy debt limits strategic optionality, raises refinancing and covenant risks, and can constrain investment in network rollout absent further capital measures.

Poor Cash Generation

Severely negative free cash flow growth and negligible FCF-to-net-income show persistent inability to turn earnings into cash. This weak cash conversion undermines self-funding for Lightspeed capex and increases reliance on external financing, raising dilution and liquidity risk over time.

Declining Revenue & Negative Profitability

Falling revenue alongside a -21% net margin indicates structural demand or contract mix issues and operational losses. Continued top-line pressure reduces room to scale Lightspeed commercial efforts, delays breakeven on new investments, and stresses returns for shareholders absent durable revenue recovery.

Telesat Corp Business Overview & Revenue Model

Company Description

Telesat Corporation, a satellite operator, provides mission-critical communications services to broadcast, enterprise, and consulting customers worldwide. The company's satellite-based services allow direct-to-home (DTH) service providers to deliver television programming, audio, and information channels directly to customers' homes; and enables broadcasters, cable networks, and DTH service providers to transmit television programming services. It offers value-added services, such as satellite capacity, digital encoding of video channels, authorization, and uplinking and downlinking services; and occasional use services for the broadcast of video news, sports, and live event coverages. The company also provides satellite capacity and end-to-end services, including space segment services and terrestrial facilities for enterprise connectivity, and internet and cellular backhaul; and rural telephony to telecommunications carriers and network services integrators. In addition, it offers broadband communication services to maritime and aeronautical markets comprising commercial airplanes and vessels; services to the U.S. government through government service integrators, and satellite services to the Canadian government; and direct-to-consumer broadband services. Further, the company operates satellite and hybrid satellite/terrestrial networks; and communications services for the oil and gas and mining industries. Additionally, it provides satellite operator services; and consulting services related to space and earth segments, government studies, satellite control, and research and development services. The company offers its services primarily through a direct sales force. As of December 31, 2021, it operated a fleet of 14 in-orbit geostationary satellites and a Canadian payload on the ViaSat-1 satellite. The company was founded in 1969 and is headquartered in Ottawa, Canada.

How the Company Makes Money

Telesat generates revenue primarily through the leasing of satellite capacity to commercial and government clients. This includes long-term contracts with telecom operators for broadband services and partnerships with media companies for television distribution. Additionally, Telesat earns income from its data services and managed network solutions. The company has strategic partnerships with various industry players, enhancing its service offerings and market reach. Factors contributing to Telesat's earnings include the increasing demand for high-speed internet access, particularly in remote and underserved areas, and the growing reliance on satellite communications for secure and resilient connectivity.

Telesat Corp Financial Statement Overview

Summary

Financials are weak across statements: revenue declined (-13.46% TTM) with negative profitability (net margin -21.04% and negative EBIT/EBITDA margins). Leverage is high (debt-to-equity 4.71) with negative ROE (-14.49%). Cash generation is a major concern, with sharply deteriorating free cash flow growth (-9285.96%) and very low free-cash-flow-to-net-income (0.01).

Income Statement

Telesat Corp's income statement reveals significant challenges. The company has experienced a decline in revenue over the TTM period, with a negative revenue growth rate of -13.46%. The gross profit margin remains strong at 85.18%, but the net profit margin is negative at -21.04%, indicating profitability issues. The EBIT and EBITDA margins are also negative, reflecting operational inefficiencies. Overall, the income statement shows declining revenue and profitability, which are concerning for future growth.

Balance Sheet

The balance sheet of Telesat Corp highlights high leverage with a debt-to-equity ratio of 4.71, indicating significant reliance on debt financing. The return on equity is negative at -14.49%, reflecting poor returns for shareholders. The equity ratio is relatively low, suggesting limited equity financing. The company's high debt levels pose a risk to financial stability, and the negative ROE indicates challenges in generating shareholder value.

Cash Flow

Telesat Corp's cash flow statement shows a troubling picture. The free cash flow growth rate is significantly negative at -9285.96%, indicating a substantial decline in free cash flow. The operating cash flow to net income ratio is 0.61, suggesting limited cash generation relative to net income. The free cash flow to net income ratio is low at 0.01, highlighting challenges in converting earnings into cash. Overall, the cash flow statement reflects weak cash generation and liquidity concerns.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	423.41M	571.04M	704.16M	759.17M	758.21M	820.47M
Gross Profit	360.27M	533.07M	665.65M	705.16M	728.00M	787.10M
EBITDA	-231.87M	67.02M	1.14B	394.71M	626.05M	678.31M
Net Income	-146.18M	-87.72M	157.12M	-80.12M	157.76M	244.82M
Balance Sheet
Total Assets	6.93B	6.95B	6.27B	6.48B	6.37B	5.58B
Cash, Cash Equivalents and Short-Term Investments	482.61M	552.63M	1.67B	1.68B	1.45B	818.83M
Total Debt	3.31B	3.13B	3.23B	3.88B	3.83B	3.22B
Total Liabilities	4.68B	4.45B	3.88B	4.64B	4.67B	4.12B
Stockholders Equity	667.02M	710.28M	661.92M	480.37M	416.52M	1.46B
Cash Flow
Free Cash Flow	-119.05M	-2.39M	29.58M	164.27M	260.61M	355.35M
Operating Cash Flow	95.22M	62.46M	169.09M	228.85M	296.39M	371.68M
Investing Cash Flow	-1.10B	-1.09B	211.93M	74.00K	-272.86M	-92.23M
Financing Cash Flow	376.36M	-170.20M	-354.65M	-104.86M	605.24M	-450.24M

Telesat Corp Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 35.90
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TSAT, the sentiment is Negative. The current price of 35.9 is below the 20-day moving average (MA) of 43.31, below the 50-day MA of 40.35, and above the 200-day MA of 33.70, indicating a neutral trend. The MACD of 0.26 indicates Positive momentum. The RSI at 44.43 is Neutral, neither overbought nor oversold. The STOCH value of 36.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:TSAT.

Telesat Corp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ET	78 Outperform	C$1.09B	16.66	24.24%	5.97%	2.96%	11.50%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
VCM	53 Neutral	C$242.90M	-12.33	-8.77%	2.14%	-11.70%	-199.55%
CMI	50 Neutral	C$41.83M	-42.67	-4.10%	1.52%	-46.11%	-149.26%
NVI	48 Neutral	C$2.48M	4.64	―	―	0.73%	―
TSAT	44 Neutral	C$583.89M	-3.61	-21.63%	―	-25.79%	-413.48%
BYL	39 Underperform	C$42.74M	-12.56	―	―	―	―