Aussie Broadband's path to its fiscal 2028 targets may be less threatened by the rise of satellite internet than some headlines suggest, according to analysts at Jarden, an Australian investment bank. The broker upgraded the stock to overweight from neutral, while keeping its price target at AU$5.50 a share.
Starlink's Impact on the Broadband Market
Starlink, the satellite internet service operated by SpaceX, has been expanding rapidly globally. In Australia, it has added hundreds of thousands of subscribers. But Jarden's analysis indicates that so far, Starlink is not stealing customers from the National Broadband Network (NBN). Instead, the satellite service appears to be lifting overall household internet penetration, expanding the total market rather than carving up NBN's existing base.
NBN connections have held steady in absolute terms even as Starlink has grown, according to Jarden. That suggests that the satellite option is attracting households that were previously offline or underserved, rather than poaching fixed-line subscribers. For context, Morgan Stanley has argued that Starlink poses a bigger threat to cable broadband than to wireless, but in Australia, the fixed-line market appears resilient.
Aussie Broadband's Execution-Driven Growth
Aussie Broadband's plan to reach its fiscal 2028 goals relies more on execution than on a sudden pricing tailwind. Jarden expects the company's underlying cost growth, excluding acquisitions, to run below inflation. That would help profits grow even if the residential broadband market cools.
The broker forecasts that Aussie Broadband's underlying earnings before interest, taxes, depreciation, and amortization (EBITDA) can compound at about 21% annually from fiscal 2025 through fiscal 2028. Underlying EBITDA is a measure of operating profitability that strips out one-time items and non-cash charges, giving a clearer view of the company's core earnings power.
Jarden's upgrade to overweight signals that the stock is expected to outperform the broader market. However, the flat price target of AU$5.50 alongside a clearer, higher multi-year earnings path changes the math. It suggests the call is not mainly that investors will pay a bigger valuation multiple, but that Aussie Broadband can “grow into” today's valuation. If EBITDA rises as Jarden expects, the implied multiple—what the market pays per dollar of EBITDA—naturally falls over time, even with no rerating.
What It Means for Investors
For everyday investors, the key takeaway is that Aussie Broadband's growth story is not dependent on Starlink fading away. Instead, the company's ability to control costs and expand its customer base in a growing market is what drives the forecast. The trade-off is sensitivity to delivery. With the target unchanged, most of the upside case sits in hitting that fiscal 2025-2028 compounding path. Miss it, and there's less valuation cushion, so the share price can reprice lower faster as forecasts are cut.
Investors should also keep an eye on broader trends in the Australian broadband market. MoffettNathanson has suggested that Starlink hype may be overdone, and Jarden's analysis aligns with that view for the Australian context. Meanwhile, the NBN's role as a backbone provider remains central, and any regulatory changes could affect the competitive landscape.
Jarden's upgrade is a vote of confidence in Aussie Broadband's management and strategy. But as always, investors should consider their own financial situation and risk tolerance before making any decisions.
