Eutelsat Communications S.A. (ETL.PA) | Investment Case

1. Company Snapshot

1.a. Company Description

Eutelsat Communications S.A. engages in the operation of telecommunication satellites for the digital communications markets.It provides video services, such as broadcast DTH, distribution, HD and ultra HD channels, and occasional use services; connectivity services; and Internet of Things and low earth orbit solutions.The company offers its services under the Eutelsat brand directly and through distributors.

As of June 30, 2021, it operated 38 satellites in geostationary orbit.The company serves broadcasters, companies, telecom operators, individuals, and government agencies in France, Italy, the United Kingdom, rest of Europe, the Americas, the Middle East, Africa, Asia, and internationally.The company was founded in 1977 and is headquartered in Issy-les-Moulineaux, France.

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1.b. Last Insights on ETL

Eutelsat Communications' recent performance was impacted by several factors. The company's video revenue faced challenges, while its low Earth orbit (LEO) connectivity revenues experienced rapid growth. A rights issue of approximately €670 million was successfully completed, part of a €1.5 billion capital raise. Additionally, Eutelsat secured almost €1 billion in Export Credit Agency financing for LEO satellites. However, the planned sale of its ground antenna infrastructure was blocked by the French Finance Minister. The company's half-yearly financial report revealed a net loss reduction.

1.c. Company Highlights

Last Price	2.27
Change Percentage	4.14%
Open	2.2
Previous Close	2.17
Market Cap ( Millions)	1181
Volume	1115477
Year High	9.29
Year Low	1.15
M A 50	2.05
M A 200	2.88

FCF Yield	-9.38%
Dividend Yield	0.00%
ROE	-13.89%
Debt / Equity	80.55%
Net Debt / EBIDTA	272.37%
Price To Book	0.7
Price Earnings Ratio	-6.0
Price To FCF	-10.66
Price To sales	0.96
EV / EBITDA	4.86

2. Eutelsat's H1 2025-2026 Earnings: A Strong LEO Revenue Growth

Eutelsat's financial performance for the first half of 2025-2026 showed a mixed bag, with total revenues standing at EUR 592 million, stable on a like-for-like basis, and down 2.4% on a reported basis. The adjusted EBITDA margin was 52.1%, down from 55.2% a year earlier. The company's EPS was -0.32796, slightly worse than the estimated -0.3. The revenue from the 4 operating verticals was EUR 574 million, down 0.6% on a like-for-like basis. LEO revenues grew almost 60% to EUR 111 million, driven by strong commercial dynamics.

Publication Date: Feb -19

                                    📋 Highlights
                                    LEO Revenues Surge:
                                                Rose nearly 60% to EUR 111 million, driving growth across all connectivity verticals.
Adjusted EBITDA Margin:
                                                Held at 52.1% on a like-for-like basis despite Video segment decline.
Capital Raise & Debt Reduction:
                                                EUR 1.5 billion capital raise achieved, lowering net debt/EBITDA ratio from 3.9x to 2x.
Video Segment Decline:
                                                Revenues fell 12.3% to EUR 260 million due to Russian sanctions and market shifts.
LEO Satellite Expansion:
                                                341 new satellites procured (total 440), ensuring operational continuity for OneWeb constellation.

                                

Segmental Performance

The company's video segment revenues were down 12.3% to EUR 260 million, reflecting the impact of further sanctions imposed on Russia. On the other hand, all the connectivity verticals delivered growth, with fixed connectivity up 17%, Government Services up 8%, and mobility up 8.5%. As Jean-François Fallacher noted, "all the connectivity verticals delivered growth this semester," indicating a positive trend in the company's connectivity business.

Valuation Metrics

Looking at Eutelsat's valuation metrics, the P/S Ratio is 0.91, indicating that the company's revenue growth is not fully priced in. The EV/EBITDA ratio is 6.81, which is relatively low, suggesting that the company's EBITDA is undervalued. Additionally, the Net Debt / EBITDA ratio has improved significantly to 2x, down from 3.9x at the end of June '25, indicating a stronger financial position.

Growth Prospects

Eutelsat is confident about its growth prospects, driven by the development of its LEO constellation. The company has procured 341 web satellites, bringing the total number of new satellites to 440, ensuring operational continuity for its customers. Analysts estimate next year's revenue growth at 5.5%, which is a positive indicator. The company's focus on making IRIS2 a success and exploring new revenue streams, such as hosted payloads, is also expected to drive growth.

Financial Position

Eutelsat's financial situation has been significantly reinforced with a capital raise of EUR 1.5 billion and EUR 1 billion in ECA financing. The company's liquidity position is strong, with undrawn credit lines and cash totaling around EUR 2.1 billion. This strong financial position will enable the company to focus on its growth strategy and deliver value to its shareholders.

3. NewsRoom

Eutelsat Communications S.A. announces offering of €1,500 million senior notes

07:22

Source:

Eutelsat Communications (ETCMY) (H1 2026) Earnings Call Highlights: Strong LEO Growth Amidst ...

Feb -17

Source:

Eutelsat Communications: Notice of the Availability of the Half-yearly Financial Report 2025-26

Feb -16

Source:

3 European Penny Stocks With Market Caps Over €200M

Feb -16

Source:

Eutelsat’s New LEO Funding And Satellite Deal Reframe Growth Risks

Feb -14

Source:

Etalon Group H1 Earnings Call Highlights

Feb -13

Source:

Eutelsat Communications: Second Quarter and First Half 2025-26 Results

Feb -13

Source:

Eutelsat Signs Almost €1bn in Export Credit Agency Financing for the Procurement of LEO Satellites for its OneWeb Constellation

Feb -11

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.77%)

6. Segments

Video

Expected Growth: 8%

Eutelsat's 8% growth driven by increasing demand for satellite-based broadcasting and broadband services, particularly in emerging markets. Growing adoption of HD and UHD channels, expansion of government and military contracts, and increasing use of satellite-based IoT connectivity also contribute to growth.

Fixed Connectivity

Expected Growth: 7%

Eutelsat's Fixed Connectivity growth is driven by increasing demand for broadband services in underserved areas, government initiatives for rural connectivity, and the need for reliable backup solutions. Additionally, the growth of IoT, 5G, and cloud computing is fueling demand for high-capacity, low-latency connectivity, which Eutelsat's satellite-based solutions can provide.

Government Services

Expected Growth: 6%

Eutelsat's Government Services segment growth is driven by increasing demand for secure satellite communications, expansion of government agencies' remote operations, and rising need for disaster response and recovery solutions. Additionally, the segment benefits from long-term contracts with government agencies, providing a stable revenue stream.

Mobile Connectivity

Expected Growth: 10%

Eutelsat's Mobile Connectivity growth is driven by increasing demand for IoT, M2M, and satellite-based broadband services. Expanding 5G networks and government initiatives for rural connectivity also contribute to growth. Additionally, the company's strategic partnerships and investments in new technologies, such as LEO satellites, enhance its market position and competitiveness.

Other

Expected Growth: 5%

Eutelsat's 'Other' segment growth is driven by increasing demand for satellite-based IoT and data services, expansion into new markets, and strategic partnerships. Additionally, the company's focus on innovation, such as its LEO constellation, and growing government and institutional business also contribute to this growth.

7. Detailed Products

Video Services

Eutelsat's video services provide broadcasting and media companies with satellite capacity to distribute TV channels and on-demand content to a wide audience.

Data Services

Eutelsat's data services offer secure and reliable connectivity for businesses, governments, and organizations, enabling them to communicate and exchange data efficiently.

Government Services

Eutelsat's government services provide secure and customized satellite-based solutions for government agencies, defense organizations, and institutions.

Broadband Services

Eutelsat's broadband services offer high-speed internet access to individuals and businesses in underserved areas, bridging the digital divide.

Maritime Services

Eutelsat's maritime services provide satellite-based connectivity for the maritime industry, enabling communication and data exchange at sea.

IoT Services

Eutelsat's IoT services enable the connection of devices and sensors, facilitating the growth of the Internet of Things (IoT) ecosystem.

8. Eutelsat Communications S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Eutelsat Communications S.A. is medium due to the presence of alternative satellite operators and terrestrial networks.

Bargaining Power Of Customers

The bargaining power of customers for Eutelsat Communications S.A. is low due to the company's strong market position and limited customer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Eutelsat Communications S.A. is medium due to the presence of multiple suppliers and the company's significant purchasing power.

Threat Of New Entrants

The threat of new entrants for Eutelsat Communications S.A. is low due to the high barriers to entry in the satellite industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for Eutelsat Communications S.A. is high due to the presence of several established players in the satellite industry, leading to intense competition for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	49.82%
Debt Cost	3.95%
Equity Weight	50.18%
Equity Cost	5.51%
WACC	4.73%
Leverage	99.28%

11. Quality Control: Eutelsat Communications S.A. passed 2 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

BOS

A-Score: 4.6/10

Value: 7.0

Growth: 5.7

Quality: 6.4

Yield: 0.0

Momentum: 7.5

Volatility: 1.3

1-Year Total Return ->

u-blox

A-Score: 3.6/10

Value: 4.4

Growth: 0.6

Quality: 3.5

Yield: 0.6

Momentum: 10.0

Volatility: 2.3

1-Year Total Return ->

Ceragon Networks

A-Score: 3.5/10

Value: 7.3

Growth: 6.8

Quality: 5.4

Yield: 0.0

Momentum: 0.5

Volatility: 1.0

1-Year Total Return ->

Hexatronic

A-Score: 3.4/10

Value: 5.9

Growth: 9.1

Quality: 3.5

Yield: 0.6

Momentum: 0.5

Volatility: 0.7

1-Year Total Return ->

Eutelsat

A-Score: 3.1/10

Value: 9.0

Growth: 0.4

Quality: 1.2

Yield: 4.4

Momentum: 3.5

Volatility: 0.0

1-Year Total Return ->

Napatech

A-Score: 3.0/10

Value: 6.0

Growth: 0.0

Quality: 4.4

Yield: 0.0

Momentum: 7.0

Volatility: 0.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

24.29%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

4.73%

Eutelsat Communications S.A. - FR0010221234

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ETL

1.c. Company Highlights

Weak Momentum

Lower Growth

Higher Yield

Cheaper

Lower Quality

Revenues Miss

Earnings Miss

Revenues Beats

2. Eutelsat's H1 2025-2026 Earnings: A Strong LEO Revenue Growth

Segmental Performance

Valuation Metrics

Growth Prospects

Financial Position

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.77%)

6. Segments

Video

Expected Growth: 8%

Fixed Connectivity

Expected Growth: 7%

Government Services

Expected Growth: 6%

Mobile Connectivity

Expected Growth: 10%

Other

Expected Growth: 5%

7. Detailed Products

Video Services

Data Services

Government Services

Broadband Services

Maritime Services

IoT Services

8. Eutelsat Communications S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Eutelsat Communications S.A. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.26$

Current Price

2.27$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA