Telesat Corporation (TSAT): A Bull Case Theory

We came across a bullish thesis on Telesat Corporation on Valueinvestingclub.com by TheSpiceTrade. In this article, we will summarize the bulls’ thesis on TSAT. Telesat Corporation's share was trading at $21.98 as of September 8th. TSAT’s trailing P/E was 7.35 according to Yahoo Finance.

Telesat (TSAT) represents a highly asymmetric investment opportunity, obscured by its complex capital structure. Historically a Canadian GEO satellite operator serving DTH and enterprise backhaul, its legacy fleet is now a declining, over-levered business. The real value lies in Lightspeed, Telesat’s fully funded 198-satellite low-earth-orbit constellation, which is structured as an unrestricted subsidiary and therefore ring-fenced from GEO debt obligations.

Lightspeed is designed with advanced digital beam-forming and optical inter-satellite links, offering latency competitive with Starlink but targeting the $320 bn enterprise and government markets rather than consumer broadband. With $3.5 bn of total capex secured through government funding, equity, and vendor financing, Lightspeed is well positioned to launch global services starting in 2026.

Geopolitical developments, including unease over Starlink’s dominance and Musk’s political entanglements, have increased demand for alternative providers, particularly from sovereigns and defense customers. TSAT has capitalized, signing contracts with Orange, Viasat, ADN Telecom, and Vocus, building a C$1.1 bn backlog that already exceeds GEO’s. Its status as a Canadian “national champion,” supported by legislation and government financing, underscores its strategic importance.

Crucially, recent credit agreements reveal carve-outs anticipating an “Independent Entity” event, suggesting a spin-out of Lightspeed may be imminent. Such a transaction would eliminate the GEO debt overhang and crystallize substantial hidden value. Valuation scenarios based on management’s forecasts imply US$70–140 per share, or +185% to +457% upside, far above the current US$1.2 bn market cap. With geopolitical tailwinds, strong contract momentum, and potential catalysts from a Lightspeed spin-out or GEO debt restructuring, TSAT offers a compelling risk/reward skew.

Previously we covered a bullish thesis on Viasat, Inc. (VSAT) by Gskinny in November 2024, which highlighted the company’s satellite connectivity for airlines and military clients along with the Inmarsat acquisition. The company’s stock has appreciated approximately by 195% since our coverage. This is because the thesis played out amid improving sentiment. The thesis still stands as Viasat’s multi-orbit strategy offers future potential. TheSpiceTrade shares a similar but emphasizes on Telesat’s asymmetric upside through its Lightspeed LEO spin-out catalyst.

Telesat Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 12 hedge fund portfolios held TSAT at the end of the first quarter which was 9 in the previous quarter. While we acknowledge the potential of TSAT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.