Eutelsat's Post-Rally Reckoning: Oversold Signal Flashes After 21% Peak Drop

Eutelsat shares tumble into oversold territory after 97% YTD gain, driven by profit-taking not operational issues. LEO revenue surges 65% QoQ as video segment declines 13.3%.

The euphoria that propelled Eutelsat shares up 97% from the start of the year has given way to a stark reversal. After closing at a 52-week high of €4.47 in late May, the stock has tumbled more than a fifth, with Tuesday's session adding an 8% loss to take the price to €3.52. The rout follows a 14% plunge the previous day, leaving the satellite operator in technically oversold territory with a Relative Strength Index of 23.9.

Yet the move is not being driven by any operational misstep. Instead, it looks like a textbook profit-taking episode after a parabolic run — the shares had more than doubled in just three months on enthusiasm around low-earth-orbit connectivity and the OneWeb network. Even after the correction, the stock remains up roughly 97% year-to-date and still trades comfortably above both its 50-day moving average of €2.82 and its 200-day moving average of €2.66.

The underlying business tells a split story. In the third fiscal quarter, Eutelsat reported revenue of €293 million, down 2.3% on a reported basis but up 3.1% when currency effects are stripped out. The connectivity segment is booming: LEO revenue jumped 65% quarter-on-quarter to €62.2 million, and for the first nine months of the year, the LEO business grew 61.6% to €172.7 million. The old video division, however, continues to bleed — revenue fell 13.3% to €128 million, hit by sanctions on Russian broadcasters and the structural decline of satellite television.

That divergence makes the valuation debate increasingly binary. The current market capitalisation stands at around €4.48 billion, but with a negative price-to-earnings ratio of -4.85, classic multiples offer little guidance. A beta of 0.06 suggests low correlation to broader indices, belying the stock's own violent swings. The market is effectively betting that LEO growth will more than offset the video headwind — a thesis that the order book supports. The backlog of €3.4 billion represents 2.8 times annual revenue, and connectivity now accounts for 58% of that total.

The broader environment adds both tailwinds and noise. Vast Space's decision to base its European headquarters in Paris and plan manned missions for 2027 — using SpaceX hardware — underscores the growing heft of the European space business, even if no direct contract flows to Eutelsat. Meanwhile, the STOXX 600 fell 0.76% on Monday as markets awaited eurozone inflation data, a reminder that capital-intensive satellite ventures remain sensitive to interest-rate shifts.

Management has held its full-year guidance: revenue in operating segments flat year-on-year, LEO growth of 50%, and an EBITDA margin slightly below prior year. The next major checkpoint comes with the release of results in August 2026, when investors will get a clearer view of whether the operational trajectory justifies the post-rally valuation. Until then, the support zone around €2.57 — a level that has mattered in previous corrections — may or may not come into play if the selling continues. For now, the oversold RSI suggests a bounce could be near, but the real test is whether the LEO story can keep overpowering the legacy drag.