Eutelsat (ENXTPA:ETL): Exploring Valuation After Recent 20% One-Month Share Price Decline

Eutelsat Communications (ENXTPA:ETL) has seen its share price move over the past month, with recent data showing a 20% decline. This comes as investors weigh the company's ongoing performance and outlook within the broader communications sector.

See our latest analysis for Eutelsat Communications.

Despite a steep 20% slide in the share price over the past month, Eutelsat Communications is still up nearly 29% year-to-date. This reflects the stock's recent momentum reversal. However, with a 1-year total shareholder return of -7%, longer-term investors have faced headwinds even as short-term gains hinted at optimism that has quickly faded.

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With the stock trading nearly 21% below analyst price targets and its recent swings fresh in investors' minds, the key question is whether Eutelsat is currently undervalued or if the market has already taken into account all future growth potential.

Most Popular Narrative: 16.2% Undervalued

With Eutelsat Communications trading at €2.84 and the most widely followed narrative suggesting a fair value of €3.39, the market price trails consensus expectations and hints at meaningful upside. This gap puts the spotlight on the catalysts and numbers underlying the narrative’s valuation.

The continued ramp-up of LEO-related revenues, especially from high-growth segments like mobile connectivity and government services, supported by large contracts with organizations like NIGCOMSAT and the U.S. DoD, indicates potential for sustained revenue growth as these services scale. The planned procurement of 100 LEO satellites by the end of 2026 and the expected financing plan for further expansion reflect a forward-looking strategic positioning that anticipates market demand shifts towards LEO solutions and suggests potential for long-term revenue growth and improved competitive positioning.

Read the complete narrative.

Curious about how these ambitious growth bets stack up against analyst forecasts? A handful of powerful growth levers could shape the next chapter for Eutelsat. There is one key profit margin assumption and a bold set of revenue expectations that might surprise even seasoned investors. Want to uncover the precise scenario behind the consensus price target? See how Eutelsat’s valuation narrative is built on forward-looking financials, not past results.

Result: Fair Value of $3.39 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, declining revenues from GEO assets and recent asset impairments could challenge the bullish outlook if these trends persist in coming quarters.

Find out about the key risks to this Eutelsat Communications narrative.

Another View: Comparing Sales-Based Valuation

Looking through a different lens, Eutelsat’s price-to-sales ratio stands at 1.1x, which is more than double the French Media industry average of 0.5x and above its peer group at 0.7x. While this suggests the shares trade at a premium, they are still below the estimated fair ratio of 1.7x. This hints the market might eventually move higher. Is this premium justified by future growth, or has the market priced in too much risk?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Eutelsat Communications Narrative

If you see a different story in the numbers or want a hands-on approach, you can dive into the data and build your own view in just a few minutes with Do it your way.

A great starting point for your Eutelsat Communications research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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