Leonard Ng asked 11 months ago
Hi Victor, Rusmin and All,
SATS recently released their full year results for FY2024-25. I used the Alpha Quadrant Analysis method to analyze this company. Somehow the final scores were better than what I initially expected. I've uploaded my assessment (in pdf format) in the below google drive link. Let me know your opinions or areas that you felt I was incorrect in my assessment. Thanks!
PS: Since I don't have the full year detailed break down of the financial statement for FY2024-25, I made some assumptions and estimates.
https://drive.google.com/file/d/17_sYOu2cDFEIJkjDb89cl_tujQ7jnX8z/view?usp=sharing
2 Answers
Victor Chng Staff answered 11 months ago
Hi Leonard,
Great analysis. Keep up the good work :)
Regarding the valuation chart of SATS, you’ll notice significant spikes both upward and downward in certain years. Using the average P/E ratio may inflate the overall average. Therefore, I would suggest using the median P/E as a more reliable gauge.
Another important consideration is that SATS before and after COVID are fundamentally different. The pre-COVID P/E trading range was based on its original core businesses — ground handling and in-flight catering — which were more stable and recurring in nature. This stability supported higher P/E valuations. However, after acquiring WFS to diversify revenue streams, SATS significantly expanded its air cargo business. This segment is generally more cyclical and may affect overall earnings volatility. As a result, historical average valuations may no longer be a suitable reference point. To be prudent, consider using the median P/E ratio and ensure there is a sufficient margin of safety.
Great analysis. Keep up the good work :)
Regarding the valuation chart of SATS, you’ll notice significant spikes both upward and downward in certain years. Using the average P/E ratio may inflate the overall average. Therefore, I would suggest using the median P/E as a more reliable gauge.
Another important consideration is that SATS before and after COVID are fundamentally different. The pre-COVID P/E trading range was based on its original core businesses — ground handling and in-flight catering — which were more stable and recurring in nature. This stability supported higher P/E valuations. However, after acquiring WFS to diversify revenue streams, SATS significantly expanded its air cargo business. This segment is generally more cyclical and may affect overall earnings volatility. As a result, historical average valuations may no longer be a suitable reference point. To be prudent, consider using the median P/E ratio and ensure there is a sufficient margin of safety.
Leonard Ng answered 11 months ago
Thanks for the feedback Victor!
I agree the median will be more reflective of the historical value. I've updated my analysis to incorporate your feedback. Uploaded my financial analysis report and valuation model for anyone who wants to analyze SATS by themselves.
Analysis Report
https://drive.google.com/file/d/1IKeTa61tcFaPMT9c0KGmKItYjxPLkNAu/view?usp=sharing Financial Analysis https://docs.google.com/spreadsheets/d/1I1DVfrNNjxA8DHlbjG2X711nVUoTW96E/edit?usp=sharing&ouid=101546598880031622199&rtpof=true&sd=true Valuation Model https://docs.google.com/spreadsheets/d/1ZZboVngCGpo0-AgZUivUpWAPLwEJ1KbW/edit?usp=sharing&ouid=101546598880031622199&rtpof=true&sd=true
https://drive.google.com/file/d/1IKeTa61tcFaPMT9c0KGmKItYjxPLkNAu/view?usp=sharing Financial Analysis https://docs.google.com/spreadsheets/d/1I1DVfrNNjxA8DHlbjG2X711nVUoTW96E/edit?usp=sharing&ouid=101546598880031622199&rtpof=true&sd=true Valuation Model https://docs.google.com/spreadsheets/d/1ZZboVngCGpo0-AgZUivUpWAPLwEJ1KbW/edit?usp=sharing&ouid=101546598880031622199&rtpof=true&sd=true
Victor ChngThanks for sharing Leonard :)
Please login or Register to submit your answer