Telesat (NASDAQ:TSAT) Shares Gap Down Following Weak Earnings

Key Points

• Telesat reported Q earnings per share of ($2.21), missing the consensus of ($0.67) by $1.54, and the stock gapped down premarket from $48.62 to $45.17 (later trading near $50.27 on light volume).
• Analyst sentiment is weak — MarketBeat shows an average rating of "Reduce" with an average price target of $37, while firms range from sell/strong-sell notes to Deutsche Bank's upgraded hold and $37 target.
• The company shows strained fundamentals with a negative net margin (37.25%), negative ROE, low liquidity (quick and current ratios of 0.25), a market cap around $730M and a negative P/E.

Telesat Corporation (NASDAQ:TSAT - Get Free Report)'s share price gapped down before the market opened on Tuesday following a weaker than expected earnings announcement. The stock had previously closed at $48.62, but opened at $45.17. Telesat shares last traded at $50.27, with a volume of 15,816 shares changing hands.

The company reported ($2.21) earnings per share for the quarter, missing the consensus estimate of ($0.67) by ($1.54). Telesat had a negative net margin of 37.25% and a negative return on equity of 1.10%.

Wall Street Analysts Forecast Growth

Several analysts have recently weighed in on the stock. Weiss Ratings reiterated a "sell (d+)" rating on shares of Telesat in a research report on Wednesday, January 21st. Wall Street Zen lowered shares of Telesat from a "sell" rating to a "strong sell" rating in a research report on Saturday, April 25th. Finally, Deutsche Bank Aktiengesellschaft boosted their price target on shares of Telesat from $19.00 to $37.00 and gave the company a "hold" rating in a research report on Thursday, March 19th. One analyst has rated the stock with a Hold rating and one has issued a Sell rating to the company's stock. According to data from MarketBeat, Telesat currently has an average rating of "Reduce" and an average price target of $37.00.

Hedge Funds Weigh In On Telesat

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the company. Gamco Investors INC. ET AL boosted its position in Telesat by 2.5% in the fourth quarter. Gamco Investors INC. ET AL now owns 1,831,693 shares of the company's stock valued at $53,302,000 after buying an additional 44,785 shares in the last quarter. PenderFund Capital Management Ltd. boosted its position in Telesat by 307.3% in the third quarter. PenderFund Capital Management Ltd. now owns 409,753 shares of the company's stock valued at $10,512,000 after buying an additional 309,153 shares in the last quarter. Vestcor Inc boosted its position in Telesat by 14.3% in the fourth quarter. Vestcor Inc now owns 200,000 shares of the company's stock valued at $5,820,000 after buying an additional 25,000 shares in the last quarter. Senvest Management LLC lifted its position in shares of Telesat by 261.5% during the fourth quarter. Senvest Management LLC now owns 134,668 shares of the company's stock worth $3,919,000 after purchasing an additional 97,411 shares in the last quarter. Finally, Millennium Management LLC lifted its position in shares of Telesat by 245.4% during the fourth quarter. Millennium Management LLC now owns 128,472 shares of the company's stock worth $3,739,000 after purchasing an additional 91,272 shares in the last quarter.

Telesat Price Performance

The stock's 50-day moving average price is $39.87 and its 200-day moving average price is $32.82. The company has a market capitalization of $729.98 million, a price-to-earnings ratio of -6.51 and a beta of 2.02. The company has a quick ratio of 0.25, a current ratio of 0.25 and a debt-to-equity ratio of 0.66.

About Telesat

Telesat is a leading global satellite operator that designs, builds and delivers high-performance satellite communications solutions across multiple markets. The company operates a fleet of geostationary satellites to provide video distribution, data networking and managed broadband services to media companies, network operators, governments and enterprise customers. Telesat's infrastructure supports television distribution, cellular backhaul, rural broadband and corporate network applications.

In addition to its geostationary offerings, Telesat is developing a low Earth orbit (LEO) satellite constellation known as Lightspeed.

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