Telesat Corp (TSAT) AI Stock Analysis

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Telesat Corp

(NASDAQ:TSAT)

Rating:49Neutral

Price Target:

C$22.50

▲(2.13%Upside)

Telesat's overall stock score is heavily impacted by financial challenges, including significant net losses and high leverage. Technical indicators indicate bearish momentum, further weighing on the score. The valuation is unattractive due to negative earnings and lack of dividends. However, strategic initiatives and partnerships, such as the Viasat contract, offer some future potential.

Telesat Corp (TSAT) vs. iShares MSCI Canada ETF (EWC)

Market Cap

C$325.15M

Dividend YieldN/A

Average Volume (3M)7.19K

Price to Earnings (P/E)8.3

Beta (1Y)1.14

Revenue Growth-20.40%

EPS Growth-161.60%

CountryCA

Employees610

SectorTechnology

Sector Strength83

IndustryCommunication Equipment

Share Statistics

EPS (TTM)-1.08

Shares Outstanding14,666,893

10 Day Avg. Volume9,808

30 Day Avg. Volume7,193

Financial Highlights & Ratios

PEG Ratio0.01

Price to Book (P/B)0.46

Price to Sales (P/S)0.00

P/FCF Ratio-134.62

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Telesat Corp Business Overview & Revenue Model

Company DescriptionTelesat Corp (TSAT) is a leading global satellite operator, providing reliable and secure satellite-delivered communications solutions worldwide. The company operates in sectors such as telecommunications, broadcast, and government, offering core services that include satellite bandwidth, managed network services, and earth station services. Telesat's fleet of geostationary satellites supports a wide array of applications, ensuring connectivity for enterprise, government, and individual users.

How the Company Makes MoneyTelesat makes money primarily by leasing satellite capacity to various customers, including telecommunications companies, broadcasters, and government agencies. Key revenue streams include long-term contracts for satellite bandwidth, managed services that offer end-to-end network solutions, and consulting services related to satellite operations. Significant partnerships with global telecom operators and technology firms also contribute to Telesat's earnings, enhancing its capability to deliver comprehensive communication solutions across diverse markets.

Telesat Corp Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q1-2025)

% Change Since: -0.90%|

Next Earnings Date:Aug 08, 2025

Earnings Call Sentiment Neutral

Telesat's earnings call presented a balanced perspective with significant strategic advancements in the LEO segment, debt management, and strategic partnerships. However, these were offset by revenue declines, increased operating expenses, and ongoing net losses.

Q1-2025 Updates

Positive Updates

Progress in LEO Segment

Telesat made significant progress in its LEO segment, Telesat Lightspeed, with a nearly CAD1.1 billion backlog as of today and a new multiyear agreement with ViaSat.

Debt Repurchase and Interest Savings

Telesat achieved interest savings of approximately USD 54 million annually due to a cumulative principal amount of debt repurchases totaling USD 849 million at a cost of USD 459 million.

Strategic Agreements and Partnerships

Telesat signed a significant multiyear agreement with ViaSat and has strategic agreements with Orange, ADN, and a term sheet with Space Norway.

Cash Flow and Financing

Telesat generated cash from operations of $139 million in Q1 2025 and completed the first two draws on financing facilities with the government of Canada and Quebec, receiving CAD 340 million.

Negative Updates

Revenue Decrease

Telesat's revenues decreased by $25 million to $117 million in Q1 2025 compared to the first quarter of 2024 due to the renewal of a long-term agreement with a North American direct-to-home customer at a lower rate.

Increase in Operating Expenses

Operating expenses increased by $6 million to $53 million, primarily due to increased headcount at Telesat Lightspeed and higher legal and professional fees.

Adjusted EBITDA Decline

Adjusted EBITDA decreased by $43 million to $67 million in Q1 2025, with an adjusted EBITDA margin of 57.7%.

Net Loss

Telesat reported a net loss of $51 million for Q1 2025 compared to a net loss of $52 million for the same period in the prior year.

Company Guidance

During Telesat's conference call to discuss the first quarter 2025 financial results, the company reiterated its guidance for the year. Telesat expects full-year revenues to range from $405 million to $425 million, with total adjusted EBITDA projected between CAD 170 million to CAD 190 million. The company also anticipates operating expenses for Telesat Lightspeed to be between $110 million to $120 million, up from $72 million in 2024. Capital expenditures for 2025 are projected to be between CAD 900 million to CAD 1.1 billion, primarily for Telesat Lightspeed. The guidance assumes a Canadian dollar to US dollar exchange rate of CAD 1.42. Additionally, Telesat ended the first quarter with $797 million in cash and expects to meet its cash requirements with $2.2 billion available under funding agreements with the Canadian and Quebec governments.

Telesat Corp Financial Statement Overview

Summary

Telesat Corp is facing significant financial challenges, characterized by declining revenue and negative profitability margins. The high leverage and negative ROE on the balance sheet, combined with volatile cash flows, suggest potential liquidity risks. While there are some areas of strength, such as a high gross profit margin, the overall financial trajectory is concerning, with noticeable declines across key metrics.

Income Statement

Negative

Telesat Corp's income statement reveals a concerning trend with declining revenues, dropping from $910.9M in 2019 to $571.0M in 2024, indicating a significant revenue contraction. The gross profit margin remains relatively high at 93.4% in 2024, reflecting strong cost control over direct expenses. However, the net profit margin is a major concern as it turned negative in 2024 (-15.4%), driven by a negative EBIT margin (-7.1%). The EBITDA margin was also impacted, dropping to 11.7% in 2024 from healthier figures in prior years. Overall, the declining revenue and negative profitability margins indicate financial challenges.

Balance Sheet

Neutral

The balance sheet indicates a moderately leveraged position, with a debt-to-equity ratio of 4.41 in 2024, suggesting a high reliance on debt financing. This high leverage poses potential risks, especially given the declining revenue. The equity ratio stood at 10.2% in 2024, showing a slight improvement over previous years, suggesting some strengthening in equity. ROE was negative in 2024 (-12.4%), reflecting losses impacting shareholder returns. While the improvement in equity is a positive sign, the high leverage remains a concern.

Cash Flow

Neutral

The cash flow statement shows volatility, with free cash flow fluctuating from $355.4M in 2020 to negative $2.4M in 2024, highlighting operational challenges. Operating cash flow remains positive at $62.5M in 2024, but the free cash flow to net income ratio is negative due to the net loss, indicating inefficiencies in cash conversion. The operating cash flow to net income ratio is also below 1, suggesting that operational cash generation is weak compared to earnings. Overall, the cash flow position reflects instability and potential liquidity concerns.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
571.04M	704.16M	759.17M	758.21M	820.47M
	Gross Profit
533.07M	665.65M	705.16M	728.00M	787.10M
	EBIT
-40.27M	568.85M	296.45M	411.86M	404.54M
	EBITDA
67.02M	1.14B	394.71M	626.05M	634.74M
	Net Income Common Stockholders
-87.72M	157.12M	-80.12M	157.76M	244.82M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
552.63M	1.67B	1.68B	1.45B	818.83M
	Total Assets
6.95B	6.27B	6.48B	6.37B	5.58B
	Total Debt
3.13B	3.23B	3.85B	3.79B	3.22B
	Net Debt
2.58B	1.56B	2.17B	2.34B	2.40B
	Total Liabilities
4.45B	3.88B	4.64B	4.67B	4.12B
	Stockholders Equity
710.28M	661.92M	480.37M	416.52M	1.46B
Cash Flow		Free Cash Flow
-2.39M	29.58M	164.27M	260.61M	355.35M
	Operating Cash Flow
62.46M	169.09M	228.85M	296.39M	371.68M
	Investing Cash Flow
-1.09B	211.93M	74.00K	-272.86M	-92.23M
	Financing Cash Flow
-170.20M	-354.65M	-104.86M	605.24M	-450.24M

Telesat Corp Technical Analysis

Technical Analysis Sentiment

Negative

Last Price22.03

Price Trends

50DMA

23.19

Negative

100DMA

25.44

Negative

200DMA

21.99

Positive

Market Momentum

MACD

-0.38

Negative

RSI

45.49

Neutral

STOCH

18.76

Positive

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 22.03 is below the 20-day moving average (MA) of 22.59, below the 50-day MA of 23.19, and above the 200-day MA of 21.99, indicating a neutral trend. The MACD of -0.38 indicates Negative momentum. The RSI at 45.49 is Neutral, neither overbought nor oversold. The STOCH value of 18.76 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:TSAT.

Telesat Corp Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VCM	68 Neutral	C$249.47M	67.46	1.61%	2.14%	9.13%	-77.24%
Sector *	62 Neutral	$11.72B	10.43	-7.10%	2.91%	7.41%	-7.94%
TSAT	49 Neutral	C$325.15M	8.35	-12.49%	―	-20.40%	-161.60%
CMI	46 Neutral	C$43.52M	24.42	-4.55%	4.85%	-41.82%	-149.06%
NVI	45 Neutral	C$2.67M	―	27.31%	―	-19.37%	-772.00%
LTE	41 Neutral	C$6.31M	―		―	30.25%	67.07%

* Technology Sector Average

Performance Comparison

TSE:TSAT

Telesat Corp

22.03

9.65

77.95%

TSE:NVI

Novra Technologies

0.08

0.03

60.00%

TSE:CMI

C-Com Satellite Systems

0.97

-0.22

-18.49%

TSE:LTE

Lite Access Technologies

0.08

0.00

0.00%

TSE:VCM

Vecima Networks

10.04

-11.15

-52.62%

Telesat Corp Corporate Events

Product-Related AnnouncementsBusiness Operations and Strategy

Telesat Secures Multi-Year Contract with Viasat for Lightspeed Services

Positive

Apr 7, 2025

Telesat has secured a significant multi-year contract with Viasat Inc. to provide Telesat Lightspeed Low Earth Orbit services, which Viasat will integrate into its offerings for aviation, maritime, enterprise, and defense markets. This partnership will enhance Viasat’s broadband connectivity services, allowing thousands of airplanes equipped with Viasat’s technology to access the Telesat Lightspeed network by 2027, and supports Viasat’s network automation goals, positioning Telesat as a key player in the dynamic broadband connectivity market.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.