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Spark New Zealand Limited
(SPK)
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Rating:67Neutral
Price Target:
$2.00
▼(-8.26% Downside)
Action:N/A
Date:10/05/26
The score is driven primarily by steady (but not high-growth) financial performance with improving cash flow and some balance sheet repair, plus an attractive valuation (low P/E and high yield). These positives are tempered by weaker technical momentum and earnings-call risks around margin pressure and underperforming divisions (notably Digital Services and broadband).
Positive Factors
Mobile market position and growth
Mobile is showing durable momentum within Spark’s core connectivity franchise. Revenue growth, higher pay-monthly ARPU and leading service-revenue share indicate customer relevance and pricing strength, helping offset declines in legacy voice and supporting the company’s broader strategic repositioning.
Negative Factors
Mature revenue base and margin pressure
A largely stagnant revenue base limits organic growth and makes earnings increasingly dependent on cost control and mix management. Falling EBIT margin and unusually low gross margin also suggest profitability may remain volatile, reducing predictability of earnings over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Mobile market position and growth
Mobile is showing durable momentum within Spark’s core connectivity franchise. Revenue growth, higher pay-monthly ARPU and leading service-revenue share indicate customer relevance and pricing strength, helping offset declines in legacy voice and supporting the company’s broader strategic repositioning.
Read all positive factors
Spark New Zealand Limited (SPK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.71B
Dividend Yield8.91%
Average Volume (3M)3.33M
Price to Earnings (P/E)7.5
Beta (1Y)1.34
Revenue Growth0.39%
EPS Growth87.50%
CountryNZ
Employees3,342
SectorCommunication Services
Sector Strength97
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.26
Shares Outstanding1,895,538,800
10 Day Avg. Volume2,396,213
30 Day Avg. Volume3,334,520
Financial Highlights & Ratios
PEG Ratio0.08
Price to Book (P/B)2.16
Price to Sales (P/S)0.98
P/FCF Ratio5.36
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)0.13
Revenue Forecast (FY)$3.69B
Spark New Zealand Limited Business Overview & Revenue Model
Company Description
Spark New Zealand Limited, along with its subsidiary companies, functions as a prominent provider of telecommunications and digital solutions across New Zealand. Its wide-ranging portfolio encompasses essential mobile, voice, and broadband interne...
How the Company Makes Money
Spark makes money primarily by selling telecommunications connectivity and related services on recurring service plans and usage-based charges across consumer and business markets. Key revenue streams typically include: (1) Mobile services: revenu...
Spark New Zealand Limited Earnings Call Summary
Earnings Call Date:Aug 19, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Feb 23, 2027
Earnings Call Sentiment Positive
Overall the call balances clear operational and financial improvements — notable free cash flow growth (+18.5%), stronger mobile revenue (+4.4%), successful portfolio action (data center sale proceeds, net debt reduction to ~1.7x) and firm guidance for FY'27 — against persistent weaknesses in digital services, broadband and margin pressure from mix shifts and one-off costs. Management presented a credible strategy (SPK-30), tangible early progress on productivity and conservative FY'27 guidance. While some divisions face structural headwinds and there is uncertainty around the outcome of the digital services review and data center earn-outs, the positive cash flow and balance sheet repair provide room to execute the strategy.Positive Updates
Stable Adjusted Revenue
Adjusted revenue was stable at NZ$3.7 billion in FY'26, with mobile growth offsetting declines in legacy voice, digital services and a reduced data center contribution.
Negative Updates
Adjusted EBITDA Decline
Adjusted EBITDA declined 2.4% to NZ$1.035 billion year-on-year, driven by revenue mix shifts (declining higher-margin legacy voice and part-year data center contribution) despite productivity offsets.
Read all updates
Q4-2026 Updates
Positive
Negative
Stable Adjusted Revenue
Adjusted revenue was stable at NZ$3.7 billion in FY'26, with mobile growth offsetting declines in legacy voice, digital services and a reduced data center contribution.
Read all positive updates
Company Guidance
Spark's FY27 guidance targets adjusted EBITDA of NZ$1,010m–1,080m, BAU CapEx of NZ$350m–380m (down from NZ$401m in FY26 and broadly within the 10–12% of revenue target), free cash flow of NZ$300m–350m (driven by EBITDA improvement, lower cash CapEx and the unwind of a prepaid tax asset), and a dividend payout ratio of 90–100% of free cash flow implying a target FY27 dividend of NZ$0.16–0.18 per share; management also remains focused on delivering NZ$110m–140m of annualized productivity savings by FY27 (NZ$101m achieved to date), while FY26 net debt-to-EBITDA was ~1.7x and reported FY26 borrowing costs were ~5.5%.Spark New Zealand Limited Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
58
Neutral
Cash Flow
70
Positive
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.64B | 3.62B | 3.76B | 3.88B | 3.69B |
| Gross Profit | 631.00M | 1.81B | 1.94B | 884.00M | 1.94B |
| EBITDA | 983.00M | 1.03B | 1.10B | 1.75B | 1.15B |
| Net Income | 499.00M | 260.00M | 316.00M | 1.14B | 410.00M |
Balance Sheet | |||||
| Total Assets | 4.30B | 4.53B | 4.63B | 4.48B | 4.19B |
| Cash, Cash Equivalents and Short-Term Investments | 157.00M | 34.00M | 59.00M | 100.00M | 71.00M |
| Total Debt | 1.95B | 2.35B | 2.39B | 1.86B | 1.87B |
| Total Liabilities | 2.65B | 3.00B | 3.04B | 2.54B | 2.71B |
| Stockholders Equity | 1.65B | 1.52B | 1.59B | 1.94B | 1.48B |
Cash Flow | |||||
| Free Cash Flow | 663.00M | 240.00M | 164.00M | 310.00M | 408.00M |
| Operating Cash Flow | 1.04B | 680.00M | 754.00M | 791.00M | 833.00M |
| Investing Cash Flow | 96.00M | -112.00M | -550.00M | 425.00M | -492.00M |
| Financing Cash Flow | -1.01B | -593.00M | -255.00M | -1.20B | -350.00M |
Spark New Zealand Limited Technical Analysis
Negative
2.18
Price Trends
1.98
Negative
1.90
Positive
1.98
Negative
Market Momentum
-0.01
Positive
45.09
Neutral
41.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NZ:SPK, the sentiment is Negative. The current price of 2.18 is above the 20-day moving average (MA) of 2.01, above the 50-day MA of 1.98, and above the 200-day MA of 1.98, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 45.09 is Neutral, neither overbought nor oversold. The STOCH value of 41.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NZ:SPK.
Spark New Zealand Limited Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $474.57M | 8.33 | 12.54% | 10.94% | 9.87% | 193.60% | |
67 Neutral | $3.71B | 7.46 | 33.26% | 8.91% | 0.39% | 87.50% | |
65 Neutral | $198.53M | 10.06 | 21.04% | 10.04% | 0.48% | ― | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
53 Neutral | $3.62B | 98.01 | 5.07% | 7.12% | 1.58% | 827.17% |
* Communication Services Sector Average
NZ:SPK
Spark New Zealand Limited
1.96
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NZ:CNU
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.