It wasn’t even two weeks ago when we first revealed that Echostar (NASDAQ:SATS), a satellite communication and Internet services provider, was planning to get back together with Dish Network. Now, the combined firm shot up a whopping 30% in the closing minutes of Wednesday’s trading thanks to word about new plans for the future following the successful merger.
Echostar has been working on what it calls a “…series of strategic transactions” following the reunification program. Most of those transactions are internal and feature wireless spectrum licenses going from Dish Network to Echostar. Still, there are some other moves going on. Echostar is hiring at a brisk pace, with a particular focus on financial and legal advisers to help it produce more cash from its assets.
However, reports noted that Dish Network bonds took a bit of a hit, as several receivables were transferred internally. A response from Citi analysts suggests that Echostar is looking more into spectrum monetization than any kind of terrestrial mobile or content provision service.
Friends in High Places
Interestingly, Echostar may be in line for a little government assistance. Previously, word emerged that the government is hopeful Echostar can ultimately rise to become the fourth major wireless service provider out there, injecting more competition into a market primarily dominated by three major firms right now. In fact, Dish Wireless just landed a $50 million grant from the National Telecommunications and Information Administration, part of the Department of Commerce, to help it build the Open RAN Center for Integration and Deployment (ORCID). ORCID, once completed, will open up testing operations for new developers against an established open RAN network.
Is Echostar Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SATS stock based on one Buy and two Holds assigned in the past three months, as indicated by the graphic below. After a 3.77% loss in its share price over the past year, the average SATS price target of $21.75 per share implies 30.91% upside potential.
