Telesat (NasdaqGS:TSAT): Rethinking Valuation After a Strong Multi‑Year Share Price Rally

Telesat (NasdaqGS:TSAT) has quietly turned into a strong performer, with the stock up around 73% this year and roughly 60% over the past year, even as earnings remain in the red.

See our latest analysis for Telesat.

At a share price of $29.11, Telesat’s 16.95% 30 day share price return and 3 year total shareholder return of 358.43% suggest investors are steadily repricing its long term potential despite recent volatility.

If Telesat’s surge has you rethinking what could move next, this might be the moment to explore fast growing stocks with high insider ownership.

With revenue starting to grow but profits still firmly negative, has Telesat’s recent rally left the stock stretched on optimism, or are investors still overlooking a genuine long term growth opportunity that the market is not fully pricing in?

Price-to-Sales of 1.3x: Is it justified?

Telesat’s last close at $29.11 implies a price-to-sales ratio of 1.3x, which leaves the stock looking slightly expensive versus peers at current levels.

The price-to-sales multiple compares the company’s market value to its annual revenue, a useful gauge for loss making telecom and satellite players where earnings are still negative.

While TSAT screens as expensive against both the US Telecom industry average of 1.3x and a peer average of 1.1x, the fair price-to-sales ratio implied by Simply Wall St’s regression analysis is a much higher 2.2x. This suggests the market may still be conservative about the company’s growth profile.

Set against its industry and peer benchmarks, TSAT’s 1.3x multiple sits at the top end of the current telecom range. However, it is materially below the 2.2x level that the fair ratio work points to as a potential anchor if revenue forecasts are met.

Explore the SWS fair ratio for Telesat

Result: Price-to-Sales of 1.3x (ABOUT RIGHT)

However, Telesat’s persistent losses and execution risk around its capital intensive LEO build out could quickly unwind sentiment if revenue momentum stalls.

Find out about the key risks to this Telesat narrative.

Build Your Own Telesat Narrative

If you are unsure about this view or want to dig into the numbers yourself, you can build a custom narrative in minutes using Do it your way.

A great starting point for your Telesat research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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