Zegona Communications plc (ZEG.L) stock analysis

In our weekly check, Zegona Communications plc is graded D (A to F). Of 22 checks on debt, profit, cash flow and trend: 9 pass, warnings: 3, red flags: 10.

About Zegona Communications plc

Zegona Communications plc is a Communication Services company (Telecommunications Services) based in the United Kingdom, listed on LSE as ZEG.L.

What our checks show for ZEG.L

Red flags

• Net debt is 2.6x a year of EBITDA (debt/equity 5.93). That limits room in a downturn and raises refinancing risk.
• Operating profit does not cover the interest bill (0.6x): interest is paid from cash or new debt.
• The net margin fell by 5.2 points over 5 years, to -5.2%: the company keeps less of each sale as profit.
• Earnings per share fell 21.1% a year over the last 3 years.
• The company is losing money: the net margin is -5.2%.
• Zegona Communications plc pays a dividend while losing money: it is funded from reserves or debt.
• The stock has fallen as much as 83% from a peak. Would you have held through that?
• Beta 3.39: the stock usually moves more than the market, both up and down.
• The share count grew by 505% in 2 years: each shareholder owns a smaller slice.
• Return on capital (ROCE) is only 3.5%.

Warning signs

• Analysts expect only about 0.9% a year of growth in revenue.
• The price swings a lot: 37.2% annual volatility. Expect large ups and downs.
• Thinly traded (about 442 thousand shares a day): buying and selling can move the price.

Strengths

• The gross margin is 80.2% and has risen by 80.2 points: pricing power is holding.
• Operating cash flow is 13.08x net profit: the profit arrives as real cash.
• Analysts expect earnings per share to grow about 67.5% a year over the next years.
• Analysts expect the net margin to improve by 17.1 points from today's -5.2%.
• Free cash flow is 51% of revenue: cash for dividends, buybacks or growth.
• After its deepest fall the stock recovered in about 2 months.

Next earnings report: 2026-11-24

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Questions

What grade does Zegona Communications plc (ZEG.L) have?

In our weekly check, Zegona Communications plc is graded D (A to F). Of 22 checks on debt, profit, cash flow and trend: 9 pass, warnings: 3, red flags: 10. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of ZEG.L stock?

This week's biggest flags for Zegona Communications plc: High debt, Weak interest cover, Margins falling. In total 13 of 22 checks show a warning or a red flag.

What does Zegona Communications plc do?

Zegona Communications plc is a Communication Services company (Telecommunications Services) based in the United Kingdom, listed on LSE as ZEG.L.

When does Zegona Communications plc report earnings next?

The next earnings report is expected on 2026-11-24. We re-run the checks every week, so the grade can change after it.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-10-31

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