Ground Control to Major Tom: The Eutelsat Group (EUTLF) has recently embarked on a momentous journey with Intelsat, forming a strategic multi-year partnership for its OneWeb Low Earth Orbit Constellation. Eutelsat OneWeb, a limb of Eutelsat, is blazing trails in the delivery of internet connectivity in Low Earth Orbit (LEO).
A Cosmic Integration
Eutelsat’s acquisition of OneWeb in 2023 marked a pivotal shift, propelling the company into the distinguished league of fully-integrated GEO-LEO satellite operators. With a constellation encompassing over 600 LEO satellites and a squad of 35 geostationary (GEO) satellites, EUTLF now stands at the juncture of innovation and expansion.
Connecting the Dots in Space
The alliance with Intelsat is akin to a cosmic tango, as it will fuse OneWeb’s LEO Network with Intelsat’s GEO and terrestrial networks. This union promises end-to-end solutions for government, networks, and mobility verticals, painting a vibrant picture of seamless connectivity in the digital realm.
Charting a New Trajectory
EUTLF’s strategic melding of minds with Intelsat signifies a visionary approach towards shaping the future. By harnessing Intelsat’s expertise, Eutelsat is steering towards the zenith in the construction of its next-generation OneWeb constellation. This evolution is poised to meet the demands of advanced communication systems, heralding a new era of agile and reliable connectivity solutions.
Financial Constellations Align
The cosmic partnership between EUTLF and Intelsat comes with a significant price tag of up to $500 million over seven years. The deal commences in mid-2024, showcasing a “firm commitment” of $250 million, inclusive of the prior deal value of $45 million inked between the two entities in March 2023. Moreover, the agreement presents an option for further enhancement of the deal’s value by an additional $250 million by the culmination of the stipulated timeframe.
In the realm of satellite operators, Eutelsat’s charms shine bright from its headquarters in Paris, France. Broadcasting over 6,500 television channels to cable and satellite homes, Eutelsat’s satellites are veritable workhorses in the spheres of fixed and mobile telecommunications services, TV contribution markets, corporate networks, broadband markets for Internet Service Providers, and for transport, maritime, and in-flight markets.
Stellar Growth and Challenges
Experiencing double-digit growth in the Mobile Connectivity segment, which contributed 12% to total revenues in the latest quarter, EUTLF is riding a wave of success. The segment’s revenues soared by 28.2% year over year, propelled by the advent of the high-throughput satellite, EUTELSAT 10B. As EUTLF sets its sights on continued growth in both GEO and LEO-based connectivity solutions, the horizon appears promising.
Dark Clouds Amidst the Stars
However, shadows loom amidst the celestial expanse as delays in the availability of ground networks cast a pall over revenues. Furthermore, a product mix with a tilt towards the sale of user terminals is exerting downward pressure on margins, presenting a challenge amidst the company’s stellar growth trajectory.
Guiding Lights in the Technological Sky
For investors seeking brighter stars in the technological firmament, Manhattan Associates (MANH), Cadence Design Systems (CDNS), and Microsoft (MSFT) stand out as stellar options. Manhattan Associates and Cadence boast a Zacks Rank #1 (Strong Buy) each, while Microsoft holds a Zacks Rank #2 (Buy) currently.
Diving deeper into the stellar constellation, Manhattan Associates’ earnings forecast for 2024 shows a 3.6% increase in the past 60 days to $3.76. With a track record of consistently surpassing the Zacks Consensus Estimate over the last four quarters, Manhattan Associates has seen its stock surge by 68.1% in the past year.
On the trajectory of growth, Cadence’s 2024 EPS estimate has soared by 3% in the past 60 days to $5.93. Celebrating a streak of outperforming the Zacks Consensus Estimate over the past four quarters, Cadence’s long-term earnings growth rate stands at 17.1%, with shares skyrocketing by 50% in the last year.
Microsoft, not to be outshone, boasts a fiscal 2024 EPS estimate of $11.63, signaling an 18.6% growth from the preceding year. With a historical success rate of beating the Zacks Consensus Estimate over the past four quarters, Microsoft’s long-term earnings growth rate stands at a commendable 16.2%, with shares surging by 53.9% in the previous year.
Who Will Rise as the Cosmic Champion?
As the stars align and technology propels into the stratosphere, the astute investor may find solace in the world of semiconductors. With the trajectory of global semiconductor manufacturing projected to ascend from $452 billion in 2021 to $803 billion by 2028, the quest for the ultimate investment beckons. Explore the uncharted territories of Artificial Intelligence, Machine Learning, and Internet of Things with the next rising star in the semiconductor universe.
Unveil the Future Now, Free of Charge >>
Gaze upon the constellations of thought and opinion expressed here, let them guide your journey through the universe of possibilities and opportunities that await in the realm of investment.
