Telesat TSAT shares ended the last trading session 10.3% higher at $12.07. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 20.2% gain over the past four weeks.
The increase in share price can be attributed to the C$2.54 billion funding secured by Telesat for advancing its Lightspeed Low Earth Orbit (LEO) broadband satellite constellation. The funding was provided by the governments of Canada and Quebec.
Telesat will be utilizing the fund for its Telesat Lightspeed network and the business and operational support systems required for the network. Telesat Lightspeed network comprises satellites and satellite launch vehicles along with a terrestrial network of landing stations and points of presence globally.
The company further highlighted that the Telesat Lightspeed network will boost the reach of the Internet and 5G networks in Canada and aid in mitigating the digital divide within the country. The development will also generate high-quality jobs in Canada while adding sizeable investment to the Canadian economy. The company has already increased its workforce by 33% in the past year.
Telesat forecasts capital expenditures for the program to be between $1 billion and $1.4 billion in 2024. It anticipates the launch of the first Telesat Lightspeed satellites in mid-2026.
This satellite communications company is expected to post quarterly loss of $0.16 per share in its upcoming report, which represents a year-over-year change of +95.8%. Revenues are expected to be $104.19 million, down 20.2% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Telesat, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on TSAT going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Telesat is a member of the Zacks Satellite and Communication industry. One other stock in the same industry, EchoStar SATS, finished the last trading session 9% higher at $24.27. SATS has returned 25% over the past month.
EchoStar's consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.23. Compared to the company's year-ago EPS, this represents a change of -253.3%. EchoStar currently boasts a Zacks Rank of #5 (Strong Sell).
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