Q: Hi,
Given the recent news on Telesat Lightspeed, what are your views on the company for a longer term hold (say 5 years or more)? Do you see further upside after the recent share price increase?
Thanks
Paul
Given the recent news on Telesat Lightspeed, what are your views on the company for a longer term hold (say 5 years or more)? Do you see further upside after the recent share price increase?
Thanks
Paul
5i Research Answer:
In the 2Q, TSAT reported a 4% decline in revenue but a big swing from a loss to profit. It affirmed guidance and the outlook is good. Switching satellite manufacturers will save the company $1.5B, so is certainly material, and the stock soared. One has to wonder how MDA can produce at 30% less than the Italian company's quote, of course. But it is a growing sector and TSAT is a fairly unique company in Canada. It is still small at $1B market cap, and a lot is riding on this contract. Timing will be key as any delays will disappoint investors. We think there is long term upside potential here. But after a 110% gain, with still lots of risks, we think buyers can wait until shares consolidate somewhat.