Can Spark (NZSE:SPK) Refocusing on Core Assets Reshape Its Long-Term Growth Prospects?

• At its 2025 Annual Meeting held earlier this month, Spark New Zealand announced a renewed focus on its core connectivity business and revealed the SPK-30 five-year strategy, following the divestment of non-core assets and a partnership for its data centers with Pacific Equity Partners.
• Despite recent declines in revenue and profit, Spark New Zealand maintained its dividend and is turning to partnerships and AI to drive future growth.
• We’ll explore how Spark's sale of non-core assets and ambition to leverage AI shape the company’s evolving investment narrative.

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What Is Spark New Zealand's Investment Narrative?

The big picture for Spark New Zealand shareholders right now is about believing in the company’s ability to sharpen its focus, following the major decision to divest non-core assets and double down on its connectivity and digital offerings. The recent announcement of SPK-30, a five-year plan centered on leveraging partnerships and AI, signals a commitment to turning operational focus into more sustainable returns. This reshaping of the business model could prove to be a short-term catalyst, potentially addressing long-standing concerns over slow revenue and earnings growth, as well as dividend sustainability. On the flip side, risks remain if the narrowing of focus fails to reignite growth, especially given Spark’s recent underperformance and lower profit margins. The latest board changes and shifting priorities mean investors are weighing a different set of near-term opportunities and risks than they were even a few months ago. How much this actually changes the company’s medium-term growth trajectory, though, is still up for debate as recent price moves don’t yet suggest a clear market verdict.

But, there’s still the issue of whether Spark’s high debt and modest growth potential can support its ambitious plans. Despite retreating, Spark New Zealand's shares might still be trading 19% above their fair value. Discover the potential downside here.

Exploring Other Perspectives

Fair value estimates from 28 individual investors in the Simply Wall St Community range from NZ$1 to a very large NZ$5.45 per share, capturing a broad spectrum of views. While market and dividend pressures remain a concern for many, these varied opinions highlight just how differently Spark’s new strategic direction can be interpreted. See what others are projecting for Spark New Zealand in the months ahead.

Explore 28 other fair value estimates on Spark New Zealand - why the stock might be worth over 2x more than the current price!

Build Your Own Spark New Zealand Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Spark New Zealand research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free Spark New Zealand research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Spark New Zealand's overall financial health at a glance.

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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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