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Eutelsat (EUTLF) and Intelsat Enter Multi-Year Partnership
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Eutelsat Group (EUTLF - Free Report) recently entered into a strategic multi-year partnership with Intelsat for its OneWeb Low Earth Orbit Constellation. Eutelsat OneWeb, a subsidiary of Eutelsat, specializes in delivering internet connectivity in Low Earth Orbit (LEO).
Eutelsat acquired OneWeb in 2023. With the acquisition, the company became the a fully-integrated GEO-LEO satellite operator. It now boasts a LEO constellation of more than 600 satellites and a fleet of 35 geostationary (GEO) satellites.
The partnership will enable Intelsat to integrate OneWeb’s LEO Network with its GEO and terrestrial networks, thereby delivering end-to-end solutions for government, networks and mobility verticals.
Also, EUTLF added that it will utilize Intelsat’s vast experience into the “build-out of its next generation OneWeb constellation” as one of its key practitioners. Next generation OneWeb is being designed to address the challenges of the next-generation advanced communication systems and deliver agile and reliable connectivity solutions.
The deal is valued at up to $500 million over seven years and will begin in mid-2024. The deal has a “firm commitment” of $250 million. This is inclusive of the $45 million pertaining to a deal signed between the two companies in March 2023. There is also an option embedded in the agreement for increase of deal value by another $250 million by the end of the stated time period.
Headquartered in Paris, France, Eutelsat is a satellite operator that broadcasts television channels (more than 6,500) to cable and satellite homes. The company's satellites also serve fixed and mobile telecommunications services, TV contribution markets, corporate networks and broadband markets for Internet Service Providers, and for transport, maritime and in-flight markets.
The company is gaining from double-digit growth in the Mobile Connectivity segment, which contributed 12% to total revenues in the last reported quarter. Segmental revenues were up 28.2% year over year. The segment’s performance is also being driven by the entry into service of the high-throughput satellite, EUTELSAT 10B.
EUTLF also has significant pre-commitments and the commercialization of the final beam on EUTELSAT QUANTUM for a maritime mobility client. The company expects this segment to deliver double-digit growth for the full year owing to steady demand for both GEO and LEO-based connectivity solutions.
However, delay in the availability of ground network is weighing down on revenues. Also, a product mix more slanted toward the sale of user terminals is having a negative impact on margins.
EUTLF carries a Zacks Rank #4 (Sell). Shares of Eutelsat have lost 41% compared with industry's decline of 50.7% in the past year.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks worth consideration in the broader technology space are Manhattan Associates (MANH - Free Report) , Cadence Design Systems (CDNS - Free Report) and Microsoft (MSFT - Free Report) . While Manhattan Associates and Cadence sport a Zacks Rank #1 (Strong Buy) each, Microsoft carries a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MANH’s 2024 EPS has increased 3.6% in the past 60 days to $3.76. Manhattan Associates’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 27.6%. Shares of MANH have surged 68.1% in the past year.
The Zacks Consensus Estimate for Cadence’s 2024 EPS has increased 3% in the past 60 days to $5.93. CDNS’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 3.4%. The long-term earnings growth rate is 17.1%. Shares of CDNS have soared 50% in the past year.
The Zacks Consensus Estimate for Microsoft’s fiscal 2024 EPS is pegged at $11.63, indicating growth of 18.6% from the year-ago levels. Microsoft’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 8.8%. The long-term earnings growth rate is 16.2%. Shares of MSFT have rallied 53.9% in the past year.
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Eutelsat (EUTLF) and Intelsat Enter Multi-Year Partnership
Eutelsat Group (EUTLF - Free Report) recently entered into a strategic multi-year partnership with Intelsat for its OneWeb Low Earth Orbit Constellation.
Eutelsat OneWeb, a subsidiary of Eutelsat, specializes in delivering internet connectivity in Low Earth Orbit (LEO).
Eutelsat acquired OneWeb in 2023. With the acquisition, the company became the a fully-integrated GEO-LEO satellite operator. It now boasts a LEO constellation of more than 600 satellites and a fleet of 35 geostationary (GEO) satellites.
The partnership will enable Intelsat to integrate OneWeb’s LEO Network with its GEO and terrestrial networks, thereby delivering end-to-end solutions for government, networks and mobility verticals.
Also, EUTLF added that it will utilize Intelsat’s vast experience into the “build-out of its next generation OneWeb constellation” as one of its key practitioners. Next generation OneWeb is being designed to address the challenges of the next-generation advanced communication systems and deliver agile and reliable connectivity solutions.
The deal is valued at up to $500 million over seven years and will begin in mid-2024. The deal has a “firm commitment” of $250 million. This is inclusive of the $45 million pertaining to a deal signed between the two companies in March 2023. There is also an option embedded in the agreement for increase of deal value by another $250 million by the end of the stated time period.
Headquartered in Paris, France, Eutelsat is a satellite operator that broadcasts television channels (more than 6,500) to cable and satellite homes. The company's satellites also serve fixed and mobile telecommunications services, TV contribution markets, corporate networks and broadband markets for Internet Service Providers, and for transport, maritime and in-flight markets.
The company is gaining from double-digit growth in the Mobile Connectivity segment, which contributed 12% to total revenues in the last reported quarter. Segmental revenues were up 28.2% year over year. The segment’s performance is also being driven by the entry into service of the high-throughput satellite, EUTELSAT 10B.
EUTLF also has significant pre-commitments and the commercialization of the final beam on EUTELSAT QUANTUM for a maritime mobility client. The company expects this segment to deliver double-digit growth for the full year owing to steady demand for both GEO and LEO-based connectivity solutions.
However, delay in the availability of ground network is weighing down on revenues. Also, a product mix more slanted toward the sale of user terminals is having a negative impact on margins.
EUTLF carries a Zacks Rank #4 (Sell). Shares of Eutelsat have lost 41% compared with industry's decline of 50.7% in the past year.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks worth consideration in the broader technology space are Manhattan Associates (MANH - Free Report) , Cadence Design Systems (CDNS - Free Report) and Microsoft (MSFT - Free Report) . While Manhattan Associates and Cadence sport a Zacks Rank #1 (Strong Buy) each, Microsoft carries a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MANH’s 2024 EPS has increased 3.6% in the past 60 days to $3.76. Manhattan Associates’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 27.6%. Shares of MANH have surged 68.1% in the past year.
The Zacks Consensus Estimate for Cadence’s 2024 EPS has increased 3% in the past 60 days to $5.93. CDNS’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 3.4%. The long-term earnings growth rate is 17.1%. Shares of CDNS have soared 50% in the past year.
The Zacks Consensus Estimate for Microsoft’s fiscal 2024 EPS is pegged at $11.63, indicating growth of 18.6% from the year-ago levels. Microsoft’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 8.8%. The long-term earnings growth rate is 16.2%. Shares of MSFT have rallied 53.9% in the past year.