Eutelsat's Strategic Milestones Can't Mask the Market's Lock-Up Hangover

Eutelsat finds itself in a deeply schizophrenic moment. The satellite operator is a linchpin in Europe's most ambitious space projects — from a €350 million military connectivity deal to the pan-European IRIS² constellation — and its low-Earth orbit business is expanding at a 65% clip. Yet the stock has shed more than 44% of its value in the past 30 days, a collapse triggered by a single mechanical event: the expiry of a 190-day lock-up period on shares issued during a capital increase.

When the restriction lifted on June 17, major holders including the French state via APE, Bharti Space, the British government, shipping giant CMA CGM, and the FSP were free to sell without constraint. The resulting supply overwhelmed demand. At the current price of €2.27, the shares are still clinging to a modest 3% daily gain, but they remain more than 50% below the 52-week high of €4.62 reached at the end of May.

Under the hood, the company's operating story is a tale of two segments. In the third quarter of its 2025-26 fiscal year, LEO connectivity revenue jumped 65% year-on-year, helping lift total group revenue to €293 million — a 3% increase on a like-for-like basis. For the first nine months, revenue stood at €884.7 million, a reported decline of 2.4% that narrows to a slight uptick in constant currency. The LEO portion alone climbed 61.6% to €172.7 million. The video segment, however, continues to drag. Quarterly revenue there fell to €128 million from €151.7 million a year earlier, weighed down by Russian sanctions and the loss of capacity contracts on two Express satellites. For the first time, connectivity now accounts for 55% of quarterly sales, overtaking video's 45% share.

Management reaffirmed its full-year guidance, with operational revenue expected to stay roughly flat and LEO growth on track to reach 50%. The adjusted EBITDA margin is forecast to edge slightly lower than last year's level. The order backlog stood at €3.4 billion at the end of March, equivalent to 2.8 times fiscal 2024-25 revenue, with connectivity making up 58% of that pipeline.

Should investors sell immediately? Or is it worth buying Eutelsat?

The fourth quarter should bring a tangible boost from the CENTAURE contract with the French military. The 10-year deal, worth roughly €350 million in total, includes a firm tranche of €138 million over four years for LEO satellite capacity in strategically critical regions. That revenue is expected to start flowing this quarter. Longer term, Eutelsat is aiming for operational revenue of between €1.5 billion and €1.7 billion in fiscal 2028-29, with an EBITDA margin of at least 65%. Hitting those targets depends in part on refreshing the OneWeb constellation: the first 440 new satellites are due for delivery this year, with launches beginning in 2027.

Away from the immediate financials, Eutelsat's role in the IRIS² project underscores its strategic importance to European security and connectivity. As part of the SpaceRISE consortium, the company will help operate a 264-satellite constellation in low Earth orbit, using laser-based intersatellite links to increase capacity and reduce latency. Eutelsat shares operating duties with SES and Hispasat. The infrastructure is designed for dual use — government applications first, commercial services later. Inflight connectivity is a key target, though executives have been clear that the biggest commercial impact will come after 2030; for now, the company relies on its existing OneWeb service already active on hundreds of aircraft.

Technically, the stock looks battered. The relative strength index sits at 31, just above the traditional oversold threshold of 30. The 50-day moving average of €3.00 looms far above current trading levels, and the annualised 30-day volatility of over 105% illustrates just how violent the recent swings have been. Remarkably, Eutelsat shares are still up roughly 23% on a year-to-date basis, a reminder that the May peak was a steep spike — and that the subsequent rout has erased nearly all those gains.

Eutelsat at a turning point? This analysis reveals what investors need to know now.

With the lock-up selling now largely absorbed, attention shifts to the full-year results due shortly. The military contract revenue from the fourth quarter will be closely watched for signs of a floor under the stock. In the meantime, Eutelsat remains a high-risk bet where long-term ambition and short-term market mechanics are pulling in opposite directions.

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