Home Networking company Dish Network Sharing launched Skyward today. here’s why

Dish Network Sharing launched Skyward today. here’s why

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What happened

Shares of Dish Network (NASDAQ: DISH) soared on Friday as analysts digested Thursday morning’s earnings report. Shares of the satellite broadcaster and wireless network operator were trading up 10.8% at 1:40 p.m. ET, down from a peak gain of 11.4%.

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So what

Dish reported fourth quarter results broadly in line with analysts’ expectations. Revenue fell 2% year over year to $4.45 billion, and earnings fell from $1.24 to $0.87 per diluted share. Dish lost 273,000 TV service subscribers in the quarter and ended the period with 8.2 million satellite customers plus 2.5 million Sling TV media streaming customers.

The stock initially fell 5.5%, but rallied to close Thursday’s trading session with a 6.8% gain. The rebound began on the earnings call, as CEO Erik Carlson said the wireless business Dish acquired from Sprint and T-Mobile (NASDAQ: TMUS) two years ago should “take off” this year. A 5G network with a cloud-based connectivity backbone is operational in Las Vegas, and Dish is rolling out similar solutions in other major cities.

Then, several analysts posted their analyzes of this report early Friday morning. Several of them reduced their target prices on Dish shares, but that didn’t always indicate a bearish attitude. Reduced target prices remained well above current stock prices in most cases. In particular, Wall Street heavyweights JP Morgan gave Dish a double upgrade from underweight (should hurt) to overweight (should perform well) while lowering its price target from $42 to $40 per share. This significant upgrade provided the rocket engines behind Friday’s price gains.

Now what

Like other analysts, JPMorgan sees value in Dish’s conversion from satellite broadcasting to the 5G network. The Vegas market was touted as a significant advantage, and the planned launch of additional 5G coverage before June 2022 should add to that advantage. Although JPMorgan analyst Philip Cusick is “somewhat skeptical” of Dish’s ability to deliver a better or more cost-effective 5G experience than other major network operators, the huge portfolio of wireless spectrum licenses of the company should form the basis of a solid, long-term. business.

So, in light of this Q4 report, it looks like you can treat Dish as an increasingly pure bet on 5G wireless networks over the next few years. Meanwhile, the stock trades at just 7x earnings and 5.3x free cash flow, making it far more affordable than T-Mobile and comparable to other wireless heavyweights.

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