Eutelsat Communications just reported full year 2026 numbers that keep the low Earth orbit pivot front and center, and the stock closed Friday at €1.77 after a flat 7 day stretch and a double digit slide over 3 months. The headline is simple: group revenue held at about €1.24b while the business still reported a loss of €457m and an adjusted EBITDA margin of 51.2%.
Price action points to fatigue. The figures point to something harsher. This is a sentiment reckoning around one core issue: the pressure that low Earth orbit investment is putting on profitability.
Love Eutelsat Communications' exposure to low Earth orbit but concerned about the ongoing losses and pressure on profitability? Consider a tighter filter of LEO style potential with stronger balance sheets and cash generation in our list of solid balance sheet and fundamentals stocks (204 results) .
FY 2026 Earnings Summary
-
Revenue (FY 2026, trailing 12 months):€1,235.9m vs. €1,243.7m in FY 2025 (a slight decline of 0.6%)
-
Net Income/Loss (FY 2026, trailing 12 months, excl. extra items):loss of €457.3m vs. loss of €1,081.9m in FY 2025 (the loss narrowed by 57.7%)
-
Basic EPS (FY 2026, trailing 12 months):loss of €0.524 per share vs. loss of €2.278801 per share in FY 2025 (per-share loss reduced by 77.0%)
-
Adjusted EBITDA Margin (FY 2026):51.2% vs. 54.4% in FY 2025 (a compression of 3.2 percentage points)
Earnings only tell part of the story, and investors who care about what Eutelsat Communications might be worth usually study the cash that actually moves through the business. Based on Eutelsat Communications' own cash flows, the stock could be a hefty 42% undervalued .
Eutelsat Bull Case: LEO Traction, But Margin Test
The bullish script around Eutelsat Communications centers on LEO momentum translating into healthier profitability, along with a funded CapEx surge that does not weaken the balance sheet.
"The main thing that has to go right is that Eutelsat executes on its heavy €4b CapEx plan for FY26 to FY29 for OneWeb renewal and IRIS², while maintaining EBITDA margins and balance sheet strength after the €5b refinancing."
On execution milestones, Eutelsat is meeting key objectives. LEO revenue reached about €297m, representing about 25% of group turnover. Net debt over EBITDA stands at 2.32x, with liquidity above €3b. The main pressure point is profitability. Adjusted EBITDA margin slipped to 51.2%, so operating leverage from LEO is not yet evident.
The price and this Narrative do not agree. → Uncover what this Narrative says Eutelsat Communications is actually worth .
Eutelsat Bear Case: Margins Still Flinch Under LEO Shift
The cautious view argues that Eutelsat Communications might struggle to turn its LEO push into healthier economics.
"Although Eutelsat Communications is growing LEO revenues and connectivity now represents a larger share of the business, the drop in adjusted EBITDA margin from 54.4% to 51.2% with a €36m rise in operating expenses tied to higher LEO cost of goods sold suggests that early LEO mix might keep compressing margins longer than expected and limit earnings quality even if the top line improves."
Fresh numbers lean toward that concern. Group revenue is roughly flat, EBITDA margin is lower at 51.2%, and guidance only points to a similar margin next year. LEO sales are near €297m with strong growth, yet earnings quality has not improved in step. The milestone that bearish investors wanted, namely visible operating leverage from LEO, is not in this set of results.
Explore Fresh Ideas Beyond LEO
Eutelsat Communications shows how heavy investment can pressure margins even when a new business gains traction. The real opportunity could be identifying stocks that appear mispriced before sentiment adjusts.
-
Company 1 - 41% below our estimate - reshapes its construction mix toward higher value civil infrastructure and data center projects.
-
Company 2 - 24% below our estimate - expands loan books in underpenetrated segments as deposit franchises supply relatively low cost funding.
-
Company 3 - 44% below our estimate - scales animal health formulations and contract manufacturing while shifting human therapies to lower cost integrated sites.
That is three of the list. See all 192 potentially undervalued companies →
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.
Companies discussed in this article include ETL.PA .
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
