Eutelsat's Papua New Guinea Test Highlights LEO Growth as Valuation Models Diverge Sharply
27.05.2026 - 15:55:27 | boerse-global.de
Deep in the remote jungles of Papua New Guinea, Eutelsat is putting its low-earth-orbit strategy to the test. Late last month, the satellite operator began service trials with local partner TE PNG at the Frieda River copper-gold project in Sandaun and East Sepik provinces. The deployment uses the Intellian OW70L dual-antenna system, engineered for high-throughput, low-latency links in extreme terrain. Rather than chasing consumer subscribers, Eutelsat is targeting industrial clients — a model that promises fatter margins and a faster payoff from its costly LEO constellation.
The timing is no coincidence. Eutelsat’s third-quarter results for fiscal 2025/26 show a business in rapid transition. Total revenue rose 3.1% year-on-year to €293 million, but the traditional video segment continued its structural decline, dropping 13.3% to €128 million. Geopolitical sanctions and expiring capacity contracts are accelerating that slide. Connectivity services now account for 55% of operating revenue, with LEO-specific sales surging 65% to €62.2 million. Fixed connectivity added 10.6% to reach €60.3 million. For the full year, management expects LEO revenue to climb roughly 50% versus the prior year, a trajectory underpinned by nine-month cumulative revenue of €884.7 million.
To fund this transformation, Eutelsat has overhauled its balance sheet. The company completed a €1.5 billion senior notes offering as part of a broader €5 billion equity-and-debt program following the OneWeb integration. The stated goal is to bring net leverage to approximately 2.7 times EBITDA by the end of June 2026. Preparations for the next-generation LEO satellite fleet are already underway, with first deliveries slated for late 2026. The order book stood at €3.4 billion at the end of March — roughly 2.8 times annual revenue, with connectivity contracts making up 58% of that backlog.
Should investors sell immediately? Or is it worth buying Eutelsat?
Yet for all the operational momentum, the stock’s valuation has become a battlefield. After hitting a 52-week high of €4.31, the shares have cooled slightly to €4.17, still up more than 130% since the start of the year. The relative strength index now hovers around 31, suggesting an oversold condition after the explosive rally. But analysts are deeply split on where fair value really lies. Discounted-cash-flow models — such as those from Simply Wall St — peg the intrinsic worth at €7.09 per share, implying a 41% discount to the current price. Narrative-based approaches, which assign greater weight to the risks of the LEO transition, come back with a fair value of just €2.39, flagging the stock as significantly overvalued. Few equities show such a stark divergence between quantitative and qualitative assessments.
Part of the recent rally has been fueled by broader sector enthusiasm. Speculation around potential IPOs in the SpaceX ecosystem has drawn fresh capital into satellite stocks across the board. Competitors such as Telesat are pursuing government encryption contracts — for example, talks with Italy on defence and diplomatic communications. Eutelsat is staying on a different course, blending its legacy broadcast business with the booming demand for low-latency data links to institutional clients. The upcoming full-year results for fiscal 2025/26, due in August, will show whether the LEO ramp can fully offset the shrinking video division’s drag on earnings. For now, the Papua New Guinea jungle serves as an apt metaphor: the company is navigating difficult terrain, but the signal is getting stronger.
Ad
Eutelsat Stock: New Analysis - 27 May
Fresh Eutelsat information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
