Telesat's third quarter was the geostationary business shrinking while the Lightspeed low-orbit build absorbs the cash. Revenue fell 20.2% year on year, and management tied the GEO decline to a non-renewed broadcast contract and reduced broadcast capacity. Adjusted EBITDA fell on the lower revenue, only partly cushioned by 12% lower operating expense. Diluted EPS was -C$3.09. With a net margin of -112.5% and no rating on the SE Score, the stock is not backed by present earnings power.
Management maintained full-year GEO revenue of CAD 300 million to CAD 320 million and adjusted EBITDA of CAD 210 million to CAD 230 million. Lightspeed spending for 2026 was lowered to CAD 1.1 billion to CAD 1.3 billion, and full global service slipped to around the end of Q2 2028 from Q1 2028. The CEO said: "We are going to launch commercial service as planned at the end of Q1." Launches begin on Falcon 9 in mid-2027, and management raised a tight launch market and a lower-rate Nimiq 6 renewal as risks.
Analysts leave this stock uncovered, so the forward numbers are ours. We project FY2026 revenue of C$322.3M, 22.9% lower, with EPS of -C$22.02, and FY2027 revenue of C$309.7M, a further 3.9% decline. The FY2027 revenue interval is wide, at 24%, and the EPS interval wider still at 58%, which says the path beyond this year is uncertain. EPS missed the estimate in five straight quarters, with a mean surprise of -239.5%. Revenue momentum is slowing its fall, from -25.1% to -20.2%, but that is still contraction.
Quality is what holds this stock back. Gross margin of 30.3% sits below its 5-year median of 65.9% and has worsened over three years, while operating margin of -8.0% compares with a 3-year slide from 38.8% to 14.3%. Free cash flow margin fell from 23.1% in FY2022 to -167.1% in FY2025, and it sits at the bottom of its peer group. ROIC of -0.6% is below the 0.8% peer median, and ROE of -76.3% trails a peer median near zero. Debt is heavy, with long-term debt of C$1.350B.
Valuation offers little relief. EV/EBIT of 78.9x is 493% above its 10-year median of 13.3x, and the free cash flow yield of -47.6% is far below the peer median of -0.5%. Debt to equity of 3.94x is 97% above its 5-year median. SE fair value is not scored for lack of data, and no analyst target is available. Short interest of 35.8% of the float shows how contested the stock is. For the price to hold, Lightspeed must launch on schedule and GEO cash flow must fund it; a further slip past Q2 2028 would show it is not.
The SE Score is not rated: Quality is at zero, which marks a weak business under the score. Quality earned 0 of 3 stars because ROIC of 3% falls short of a 6.1% cost of capital, net debt is 33.4 times EBITDA, and interest cover is -0.1x. Moat earned 0 of 3 because ROIC has not topped 15% in any of the last 10 years, with a 10-year median of 9%. Value is not scored because the data is too thin, so it neither lifts nor lowers the result.
Telesat Corporation is a satellite operator providing mission-critical communications solutions through Geostationary and Low Earth Orbit segments. It sells broadcast, enterprise and consulting services, including direct-to-home television, telecom carrier capacity, backhaul, broadband, and maritime and aeronautical links, to customers across the Americas, Europe, the Middle East, Africa, Asia and Australia via a direct sales force.