Telesat (TSAT) Moves 7.5% Higher: Will This Strength Last?

Company Overview - Telesat (TSAT) shares increased by 7.5% to close at $29.85, with a notable 27.7% gain over the past four weeks, driven by strong trading volume and interest in satellite and communication stocks due to rising demand for global connectivity [1] - The company is performing well in both its Low Earth Orbit (LEO) and Geostationary Orbit (GEO) satellite businesses, with significant momentum in the LEO segment, particularly through the Telesat Lightspeed program [2] Business Development - Telesat's commercial pipeline is robust, with a committed backlog for the Lightspeed program exceeding C$1 billion at the end of Q2 [2] - The company is making advancements in satellite development, ground infrastructure, and network software, including a partnership with Calian to develop the operational data platform for the Lightspeed LEO network [3] Financial Guidance - Telesat has reiterated its 2025 guidance, expecting revenues between C$405 million and C$425 million, with adjusted EBITDA projected between C$170 million and C$190 million [4] - Total capital expenditures are anticipated to be between C$900 million and C$1.1 billion, primarily related to the Lightspeed initiative [4] Earnings Expectations - The company is expected to report a quarterly loss of $0.94 per share, reflecting a year-over-year change of -1075%, with revenues projected at $69.96 million, down 31.1% from the previous year [5] - The consensus EPS estimate for Telesat has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [6] Industry Context - Telesat is part of the Zacks Satellite and Communication industry, where another company, EchoStar (SATS), experienced a 2.4% decline in its stock price, with a 17.5% return over the past month [6] - EchoStar's consensus EPS estimate has changed by +3.1% over the past month, reflecting a year-over-year change of -136.5% [7]